Suggested Text for Letter to the Prime Minister on GATS

Dear Prime Minister,

I am writing to express my opposition to New Zealand’s participation in the General Agreement on Trade in Services (GATS) at the World Trade Organization.

New Zealanders must have the right to decide what rules govern the services that we rely on in our daily lives. Your government should therefore be seeking ways to remove New Zealand’s services from this agreement, not extending the coverage of the GATS rules.

The Agreement is based on an economic model that treats the world as a market place where every service is a commodity to be bought and sold, and where the Treaty of Waitangi, social justice, human rights, morality and mutual obligations have no place.

We have experienced that model since 1984 in the form of privatisation, deregulation, unrestricted foreign investment, user charges, contracting out, flexible labour markets and commercial Treaty settlements. We know that it has failed. Your government has admitted as much.

Why, then, are you supporting negotiations that would extend and entrench this model and put the interests of big foreign corporations ahead of people’s rights to affordable, accessible and quality services in New Zealand and around the world?

Your government presents itself internationally as a champion of democracy. Yet the GATS is fundamentally anti-democratic: it prohibits central and local government, and bodies who are performing delegated responsibilities, from using policies, regulations and practices that give preference to local firms and restrict foreign control of our services, once the government has ‘committed’ those sectors to the GATS rules.

These rules are designed to make it almost impossible for present or future governments to pull back from them, even when the market model has failed or people and their governments want to reject that approach. What is democratic about an agreement that prevents a government from pursuing the policies it was elected on? You have already experienced this constraint in the way that the GATS has blocked your policy to introduce compulsory local content quotas in broadcasting.

Why, then, is your Government promoting an agreement that ties the hands of present and future government in a fundamentally anti-democratic way?

The Labour Government talks of the Treaty of Waitangi as the nation’s founding document. Yet Maori have been excluded from the process of negotiating the GATS. Worse, your Government continues to support and negotiate the extension of the GATS - a treaty which effectively constrains the ability of the Crown to adopt measures to honour te Tiriti.

The protection ‘reserved’ for Maori in the original GATS schedule back in 1994 makes no mention of te Tiriti and does nothing to address the real impacts of GATS on recognition of mana whenua, protection of taonga, promotion of the language and culture, creation and protection of decent jobs, culturally-appropriate models of development, affordable access to good quality utilities and services, and ensuring that foreign investment applications don’t impede Tiriti claims.

Why, then, is your Government negotiating an extension to a binding international treaty that effectively overrides te Tiriti o Waitangi?

Despite the insistence of poorer countries, the WTO has failed to produce the assessments of the impact of existing GATS rules and commitments which are required under the text of the agreement before any new negotiations can begin.

The Ministry of Foreign Affairs and Trade (MFAT) and other ministries have failed to conduct such an assessment at the national level. Your officials and ministers have claimed that the GATS will give ‘exporters’ of services like education, construction, tourism, consultancy and postal privatisation better access to other countries’ ‘markets’. But they can produce no credible research to show the purported benefits of the agreement since it was signed in 1994.

Nor is there any credible or systematic research from ministries in services sectors affected by the GATS about the implications for their domestic policies, measures and regulations now and in the future.

Why, then, does your Government claim there are benefits for New Zealand from free trade in services when this based only on ideology and without conducting an informed analysis of the potential costs of this agreement across the range of services concerned?

The secretive process of negotiations at the World Trade Organisation denies the public, parliament and tangata whenua any effective role in determining the future of services which form a central part of our daily lives in this country.

The agreement, which can be enforced through a supra-national court and is extremely difficult to exit from, amounts to entrenched legislation. Yet its eventual content is solely in the hands of your Cabinet. Very few of your Ministers even seem to be aware of the GATS and its implications.

The Labour Party has been strongly critical of executive law-making when it is conducted at the national level, yet it is prepared to defend these practices for international trade treaties.

Why, then, is your Government prepared to defend the exercise Executive law making power to make the equivalent of entrenched legislation that binds future governments?

Your Government claims that public services will be protected from the GATS. Yet it failed to disclose in its ‘consultation’ document that it has asked the European Union to remove its protection for public utilities and services. This contradicts your stated philosophical position that national governments should retain the right to control their core public services.

Your officials also claim that there is no risk to public education and health services in the GATS. Yet there are already commitments on education which impact on the measures New Zealand can adopt in the education sphere. Your Government has also made commitments to free trade rules covering ambulance, aged care and dentistry in the GATS-plus schedule of the free trade and investment agreement with Singapore.

Many sectors and sub-sectors in the GATS classification list, aside from those dealing explicitly with education and health, have an impact on the kind of measures which can be adopted by the various authorities responsible for education and health care. Commitments in such diverse areas such as construction, health insurance, catering, cleaning, laundry, testing, asset management, human resource management, printing and publishing will become even more significant if your Government, or any future government, pursues the policy of public private partnerships or private finance initiatives in areas like health and education.

New Zealand is also actively involved in negotiations that would extend ‘disciplines’ on domestic regulation that would affect qualifications, licensing and technical standards in health and education, and many other services.

Why, then, does your Government continue to claim that health, education and other public services are not and will not be affected by the GATS rules?

Your Government claims to be deeply concerned about the interests of poorer ‘developing’ and ‘least developed’ countries. Yet those countries objected to the original GATS negotiations and continue to express grave concerns that this agreement will make their fledgling services sectors vulnerable to the predatory and unethical practices of transnational firms.

The activities of Transend in South Africa and other poorer countries show that these accusations can apply equally to New Zealand. Yet your Government has asked other countries to lock open their postal services to Transend and similar companies, including consultancy services to oversee the privatisation of postal services – something which your Government has rejected as undesirable.

Governments from the South have consistently demanded that an impact assessment of the existing agreement is conducted before new negotiations begin. Your Government has not supported that demand. They have also demanded that the right to take emergency safeguard measures is settled before any new negotiations. New Zealand’s position on this is unclear.

Why, then, does your Government continue to take an aggressive position in support of the GATS negotiations and fail to support demands from governments from the South for full assessments of the existing GATS and the development of emergency safeguards to ensure they can protect their national services from transnational predators, as a pre-requisite to the launching of any new negotiations?

Governments from many other countries have faced similar challenges to the substance, process and effects of the GATS. A number have prepared ‘consultation’ documents outlining the requests made by and of them. Most of these were released in October or November last year. Even then, they met strong criticism about the inadequacy of the content and the consultation process. In a number of countries, the date for submissions has had to be extended.

Australia belatedly released a ‘consultation’ document prior to Christmas, under pressure from a pending Senate committee inquiry into the GATS. The Australian Labor Party (ALP) is supporting that Senate inquiry and has established its own GATS task force that is conducting hearings around the country. The ALP has called on the Government not to table any ‘offers’ in Geneva until these processes are complete.

Your Government promised a ‘consultation’ document would be posted on MFAT’s website on 6 January. It did not emerge until 30 January, with a deadline for submissions of 28 February. This is outrageous. The Government simply cannot expect people to understand such a technically-worded document, consult with their constituencies and any relevant overseas partners, draft a submission, consult back with their organisations and table an informed submission within that time. Nor can you seriously suggest that MFAT will have the time to analyse all submissions carefully before preparing a position paper to put to the Cabinet, then draft the Government’s ‘offer’ to table in Geneva on 31 March 2003.

The responsibility for conducting this process rests with the officials of the Ministry of Foreign Affairs and Trade. They are hardly impartial. MFAT’s mandate is to extend this agreement and, in line with the APEC ‘Bogor Declaration’, to achieve free trade in services by 2010.

It is now clear that the ‘consultation’ document they prepared has serious omissions. For example, it failed to disclose that your Government has asked the European Union to remove its protection for public services and utilities. This casts grave doubt over the accuracy of what people have been told about the ‘requests’ and ‘offers’ and further undermines the integrity of the whole exercise.

Further, the claim from MFAT officials that the domestic implications of such agreements are not their responsibility reinforces the view that the Government is not genuinely interested in what people, other than services ‘exporters’, have to say.

Why, then, is your Government bothering with the pretence of a consultation that is so deeply flawed and that is intrinsically biased towards extending the coverage of free trade rules over New Zealand’s services?

I have written this letter to you as Prime Minister, rather than to the Ministry of Foreign Affairs and Trade, because the position taken by New Zealand in these negotiations is a ‘whole of government’ decision. The responsibility for that position rests with the Cabinet, chaired by you. I do not want these concerns fobbed off as a submission in MFAT’s cosmetic ‘consultation’ process. Instead, I ask you and your Government to:

· Abandon the 31 March 2003 deadline and stop your work on the GATS negotiations;

· Commission an independent and participatory Impact Analysis from the Law Commission on the implications for current and future policy and regulation of our services of

(a) the existing GATS agreement and commitments;

(b) the extension of that agreement to cover any other services; and

(c) the more extensive GATS rules on domestic regulation, services and government procurement being proposed in Geneva..

· Commission the Maori Law Commission to consult extensively with Maori throughout the country about what the current and potential GATS rules and commitments could mean for them and for te Tiriti o Waitangi and act on the result of that report;

· Open the debate about who should control New Zealand’s services, based on what principles and priorities, and how New Zealand governments can reclaim control of these decisions from the WTO;

· Show leadership by promoting an alternative economic model for world trade that put the rights and needs of people and poorer countries before those of transnational corporations.

Yours sincerely,