WIDE Briefing:

Many good reasons for women to be against GATS

By Christa Wichterich

The General Agreement on Trade in Services (GATS) is geared to the liberalization of all service markets. Currently, about 160 branches of services are listed by GATS. They comprise areas which are either already covered wholly by private providers or run mixed entities (private and public owned). They also include sectors covering basic needs which up to now are being administered exclusively by the public sector. This wide range includes insurances and the banking sector, traffic and telecommunication, energy and water supply, health care, education, culture, the construction sector, waste disposal, and tourism together with all social services e.g. services for the elderly and youth programmes.

Through GATS all these services should be submitted to the WTO-principles of free market access and equal treatment of domestic and foreign suppliers, of private, public or non-profit providers. GATS lists four modes of trade with services:

Mode 1: Cross-border supply (e.g. sending of goods, courier services, call centres, music videos on the internet, telemedicine, e-learning etc.)

Mode 2: Consuming of services abroad (tourism or business travels abroad, medical treatment or education abroad, etc.)

Mode 3: Business activities abroad (foreign direct investment, branches abroad, joint ventures, etc.)

Mode 4: Temporary job migration (employees of transnational companies in different foreign countries, leasing and job procuring agencies which are sending people abroad under special conditions, etc.)

Whoever speaks about services must not be silent about the role of women. The service sector is mostly a women’s domain all over the world: the female teachers in public schools, the nurse taking care of aged persons in private households for a meagre salary and without social protection, the housewife taking care of her family without any pay, the sex worker in a tourist destination, the tele-worker who is working via telephone in her kitchen. The scenario is huge and mostly invisible. In the EU more than 80 % of all working women are found in the service sector where they are either employed or “self-employed”. Wherever essential provisions are concerned, the public and the private sector are virtually going hand in hand with unpaid and informal women’s work.

There are at least ten good reasons for opposing GATS, especially from the side of women:

1) We are against GATS and the privatization of public welfare services as it transforms education, health care, care of the elderly, water and energy supply, culture and mobility into commodities on the world market, just like cars, engines and computers. Essential provisions cannot simply be converted into a supermarket of products and services, sold at market prices. Education, health, water supply, social security and security for old age are public goods which form the common good of society comprising their human and social capacities and potentials for development. All members of society are entitled to enjoy these public goods based on their human and civil rights. GATS is converting public goods in commodities and thus undermines fundamental social rights. It is not geared to guaranteeing access to public goods as an entitlement. Rather it is giving access only to those who can pay. Commercialization of essential provisions means that they are channelled to where the money is and not where needs or a legal claim exist.

2) We are against GATS because through liberalization and privatization of public services not all members of society are receiving social care. The weak ones become losers of the game. GATS is undermining the principle of solidarity. As long as basic needs are covered by taxes and social security contributions, a re-distribution or horizontal subsidizing is taking place between healthy and sick persons, the young and the old, people with higher and lower incomes, people with a job and the jobless. Privatization, the appeal to take over responsibility individually and the enforced contributions to private insurance companies are replacing solidarity with individual performance and individual purchasing power. At the same time, the money now paid for private insurance schemes is lacking in the public budgets. This in turn leads to budgets-cuts and a deterioration of public services.

The same effect is caused by the rules on “non-discrimination” (National Treatment) of the GATS agreement. They require governments to give equal treatment to domestic and foreign providers as well as to non-profit and profit institutions in order to create equal conditions for competition. In case a government subsidises a community or church-run hospital, then - according to GATS - it must cancel this subsidy or pay an equal subsidy to e.g. a US hospital chain in the same country. If a government supports education and health activities through women’s projects then it must give the same subsidy to profit-oriented education and health institutions which are not at all gender-sensitive. Thus public funds are re-distributed among private investors and profit-oriented providers while the public sector is continually impoverished.

As GATS is torpedoing the principle of solidarity and the welfare state, it creates inequality in essential provisions instead of equality as well as insecurity of provisions for the weak who lack purchasing power. By kicking out and drying up the public sector through competition, GATS brings about a polarization of the provisions and a two-class system within the social services: on the one hand we find the profit-oriented, well equipped and well staffed service providers which charge a high price, on the other hand we find the public welfare system understaffed and poorly equipped. Women rely to a high degree on an affordable public welfare system, therefore they are the first to suffer from cuts in public funds and the corresponding deterioration of public services.

3) We are against GATS because liberalization is submitting all offers for the coverage of basic needs to competitive pressure. Public and private providers on the service market become more competitive by offering low wages and requiring high job performance. They are able to save expenditures by becoming ‘lean’, in the meaning of laying off or informalizing employment, by making it more flexible or by outsourcing. The jobs created under these conditions are often insecure, low paid and part-time employments. This is hitting women first, especially if they have a low level of qualification. Women who are forced to create their own job by forming a “one-woman micro-enterprise” rendering services, can only compete if they offer their workforce at an extremely low remuneration level.

The pressure coming from competition enforces the on-going informalization and deregulation of employment, the outsourcing and fragmenting of work and thus, stress at the workplace. This is not only the case in private corporations but also in the public sector. However, the State and the communities are not only important employers of women, but they are also the entities who implemented most of affirmative actions and equal opportunities measures for women. On the other hand, the private sector is mostly not willing to adopt positive discrimination of women or any quota-system. Those measures are considered as distorting free competition.

WTO talks about marvellous job opportunities created through GATS. Certainly there will be more insecure and badly paid jobs in the service sector. And there will be fewer jobs with sufficient social guarantees and legal protection creating a secure livelihood. The pressure exerted on wage costs is growing. This development is taking place mostly to the detriment of working women in the service sector.

4) We are against GATS and the liberalization of public basic needs because wherever health, education, water supply and social services must be placed on the market, work will be rationalized and efficiency and productivity sharply raised. Because this way profits are made. However, person-oriented and welfare services can only be rationalized in a limited way. Raising efficiency and productivity are limited by humanity itself. Body care, education, tenderness can not be accelerated endlessly. Therefore, as profitability is dictating, care work, being slow and expensive, is catapulted out of paid economy. But it is mostly women who work in this sector. This means that women are losing paid jobs. Nursing and other welfare services kicked out from the job market, are again taken up by women who then render unpaid services by taking care of sick relatives in their homes, who were sent home from hospitals only shortly after surgery due to “standardized norms”. Thus, liberalization and efficiency required in the service sector are only shifting work from the paid sector into the unpaid sector. Women have fewer jobs securing their existence and more unpaid work.

5) We are against GATS and the liberalization of public services, because the main goal of private service institutions is profitability, all other objectives must be subordinated to the latter. They invest in areas where they can make profits. Unprofitable areas are left to the public sector. For instance, service companies are mainly investing in water supply systems in residential areas where people with high purchasing power are living. Private health insurance companies lure clients with low risk and high income. As women have a higher life expectancy they are a higher risk and must pay higher contributions than men. These selective company strategies are called “cherry picking”. Profitability is not only determining investment and target group but also the service itself: quantity is given preference over quality. This means as many surgery interventions as possible and using the most expensive medical equipment, high energy input, no matter whether this is ecologically feasible or not, water supply without considering either quantity or waste - without any interest in saving resources, because this would mean costly repairs of water pipes. Women try to compensate for the lack of quality health care or the lack of quality of drinking water supply by caring for sick relatives or by boiling water to reduce the risk of infections for their babies. Profitability has its social and environmental price. Therefore the provision of basic needs is certainly the worst place for profit making.

6) We are against GATS because it is only geared to economic gains without considering social losses and their consequences. Accordingly, GATS does not show any gender sensitivity or concern about gender justice. One example is the further liberalization of the tourist sector. GATS doesn’t consider the fact that many long-distance travels are made by sex tourists and business men, who take advantage of the growing number of prostitutes in countries where the governments see this revenue as a substantial contribution to stimulate economic growth. Another example of social ignorance shown by GATS is the temporary migration of highly qualified experts. Governments only see their remittances back home as economic gains, without considering the consequences, the drain of qualified persons from certain areas, such as the health sector, has on countries in the South. For the same economic reason - the remittances - governments in the South demand that the temporary migration of less qualified persons should be included in GATS. This could turn into a kind of carte blanche for those private agencies, job placement institutions and touts, that are trading with women by pushing them in precarious jobs, exploiting them and converting them into prostitutes. GATS is not wasting any thought about this. It is blind to social and gender issues.

7) We are against GATS because we do not believe that liberalization of the service sector will bring great advantages in terms of development to Southern countries and eradicate poverty. On the contrary: the liberalization and privatization of the public sector in the wake of structural adjustment programmes has shown the preponderance of adverse effects. Trade in services – with the exception of tourism – is nearly exclusively in the hands of industrialized nations. The EU makes no secret of the fact that their main goal is the export of services by European transnational companies, for them GATS is “mainly an instrument for the benefit of enterprises”. Companies in the OECD countries are gaining most from liberalization. The WTO says that countries in the South can decide freely what and where they want to liberalize. But the WTO knows only too well the real power relationships between OECD countries and the indebted Southern countries prone to crisis. Currently they are pressurised harshly in the bilateral negotiations. But we are also afraid that many governments of the South are only interested in economic gains, while they give no plugged nickel for the social price to be paid, especially by women.

8) We are against GATS because it is hitting democracy in the face, just like all the other liberalization agreements of the WTO. The negotiations, that are penetrating deeply into national politics, the common good, public property and the welfare of the individual, are held behind closed doors and not made transparent. The EU is negotiating on behalf of its member states without involving national Parliaments or the public in the decision making process. The most important decisions are devised by OECD-members and the governments from threshold or big market countries in the so-called Green Rooms. The smaller and weak states of the South and the East remain excluded and have not even the resources and capacities for participating in the whole lot of negotiations. On the other hand, transnational companies such as service enterprises from Europe, the US and Japan strengthened their lobbying capacities and were able to join the game in a focused manner.

Even now more precise information about requests and offers of the governments are kept secret and declared as confidential matters, the planned negotiation rounds are not made public on time and the criticism forwarded by social movements and their demands remain unconsidered. An example: Due to massive public protests in Cochabamba, Bolivia, the privatization of the water supply system was revoked showing very clearly the resistance of the people. Despite this, the EU is demanding that Bolivia should liberalize its water sector. Therefore the consultations taking place currently between the EU commission and various governments are a democratic farce.

9) We are against GATS because the agreement is part of a “progressive liberalization”. So far the EU has not offered any liberalization measures in the areas of education, health and audiovisual services. However, the EU is pointing at the fact that the current offer might be modified and that it intends to do so. Liberalization and privatization are a creeping, step-by-step process. This is clearly shown by the fact that GATS includes a furtive new agreement on investment which is strengthening the rights of the investors vis-à-vis governments. At the same time it is debilitating governments’ right to regulate because they have to prove that the regulations are not trade barriers. The goal of the EU policy, “to strongly promote our own European interests” is clearly visible when looking at the fact that currently the EU is asking 72 countries to liberalize their water supply systems without making any offer in this area, in order to leave the terrain to European multinational companies.

10) We are against GATS because it spoils the prospects for the future. GATS is a one-way street or a trap. It is almost impossible to revoke any liberalization measures already taken or to suspend it for a certain period, e.g. in case of an emergency or crisis or when a government changes. Thus GATS becomes an economic power tool with its own rules and regulations which is subordinating democracy and national sovereignty of the states with their rules and regulations. Social and environmental standards, ecology and consumer protection can be sanctioned as “unnecessary trade barriers”.

We insist on the idea that these quality standards must not be eliminated by WTO law. Social and gender justice, the provision of basic needs, environmental protection, human rights must be given preference over trade rights and commercial law.

We insist on the democratic right of all persons to receive information, participate in a democratic process, and resist undemocratically made decisions. The requests and offers already sent out by the EU must be withdrawn as they were made without the participation of the public. Furthermore we think that the provision of basic needs must be subordinated to democratic decisions and to the subsidiary principle which implies that they should be realized at local level as far as possible. Communities and societies must be enabled to decide in an autonomous way and at any time how to organise their public services. Nobody and nothing must be forced to liberalize nor to privatize.

No doubt, the public sector must be reformed as often it is inefficient, sick and corrupt and unable to guarantee basic rights and the provision of basic services to all members of society. But GATS and privatization is not the right path to follow. We must look for alternatives and re-invent social thinking and solidarity. But for this we do not need any GATS. Therefore we will continue our struggle to oppose GATS and to commit ourselves to find alternatives offering social and gender justice.