In yet another deceitful move by rich industrialised nations to aggressively access developing country markets, the just released draft WTO Ministerial text on Services is deliberately ambiguous on whether developing countries will have any choice but to enter into services negotiations when requested to do so. Such a process would be reminiscent of the disastrous negotiations which took place on Telecoms and Financial services in the WTO in 1997.  


Said Aileen Kwa of Focus on the Global South, “This is the real agenda in Hong Kong. Whilst Pascal Lamy downplays Hong Kong so that everyone else is caught off guard, what is really at stake is developing countries’ control over their service sectors. And that includes essential services such as water, education and healthcare.”


The draft Ministerial text on Services has been interpreted by some delegates to mean that developing countries would be mandatorily required to enter into formal and institutionalized services negotiations with powerful groups of developed countries after Hong Kong. If this were the case, the concern is that developed countries would form a critical mass in the proceedings, encircling developing countries and forcing them not only to enter into negotiations but also to accept what is on offer.


Paragraph 10b) of the new text states that countries ‘shall enter into …. negotiations on the basis of … requests’.


“The real winners will be the US and the EU. A global baseline of commitments will be established, taking away domestic provisions for the protection of local suppliers or for the provision of universal services. Since the negotiations will be driven by exporters, regulation will fall on the side of safeguarding the interests of foreign suppliers over local ones,’ said Kwa.


The acceptance of such a model would change the current flexible GATS architecture from a bottom-up flexible approach. By also requiring states to register with the WTO the sectors they intend to engage in negotiations, this grossly unbalanced ‘sectoral’ approach will become formally sanctioned and monitored in the same way as the Telecoms and Financial Services negotiations.


Developing countries, spearheaded by Brazil, are vigorously opposed to the current proposals put forward by the EU and US to open up their sectors. If the EC proposal on ‘numerical targets’ is accepted, it would mean the opening up of 93 of 163 sub-sectors in developing countries. This additional ‘mandatory’ and ‘formalised’ approach to services negotiations is likely to magnify that opposition.


“This text makes matters much worse for developing countries than could possibly have been imagined. This language appears innocuous, but it is the death knell for public services in developing countries. In effect, they will have no choice but to open their service sectors to predatory foreign firms, which have little or no concern for the development priorities of developing countries.’


It is clear the EU and US want sectoral negotiations in GATS post Hong Kong, using the Hong Kong text as a basis to do so. If we don’t watch out, the ambush at the WTO will succeed while we are looking the other way.


For more information or to arrange an interview, please call Aileen Kwa on +41 79 625 8536  (Geneva) or Brett Solomon on +66 7 059 1713 (Bangkok)
Focus on the Global South