New Orleans, Louisiana
U.S. trade negotiators at the World Trade Organization (WTO) are currently seeking to expand an existing trade agreement called the General Agreement on Trade in Services, or GATS. Negotiators are not only trying to extend the reach of GATS to more sectors and thus more areas of our lives, but they are also working to create new GATS rules that will further limit how governments around the world regulate and provide services in the public interest. Unfortunately, the interests of workers and their families have not been the focus of these GATS negotiations. Instead, negotiators are prying open countries' markets to foreign service providers without adequate public discussion or any clear assessment of the impacts these negotiations will have on workers' rights, the environment, and social and economic development.
As part of the multi-year, multi-issue Campaign for Global Fairness we launched in 2000, the AFL-CIO is working with trade unionists and other allies from around the world to change the current direction of the GATS negotiations. Through membership education, international solidarity, corporate campaigns and political action, we will make our voices heard in the domestic and international arena. We demand that the GATS must serve the needs of the many, not just the few.
We are deeply concerned that GATS negotiators - with little expertise on regulatory policy, development, or the social aspects of basic services - are intruding into areas of domestic law and policy that have very little to do with traditional trade rules on tariffs and quotas. The GATS now covers investment and labor mobility as well as trade, and GATS rules could facilitate the privatization and deregulation of services in a broad range of sectors.
- Because the GATS covers investment in services, it will affect the regulation of purely domestic services, like construction and sanitation. Even rules that treat foreign and domestic service suppliers the same - including rules setting standards for professional licensing and certification, safeguarding public health and safety, ensuring universal access to basic services, controlling monopolies, and protecting workers' rights and the environment - could be challenged at the WTO if foreign investors feel these rules unduly constrain their competitiveness.
- The GATS also contains rules on the temporary entry of service personnel. Some countries have suggested that the GATS should allow companies to import workers with less government oversight, yet the GATS contains no provisions to ensure that the fundamental rights of these workers will be protected.
- Except in the narrowest of circumstances (where no private providers compete with government services), public services can be subject to the GATS. This allows WTO members to challenge domestic policies that protect governmental services if they believe these policies put private providers at a competitive disadvantage, even where government involvement is necessary to guarantee access to essential services in areas such as health care, education, and utilities. WTO rules will also penalize governments that reverse privatizations, even if such privatizations have lowered service quality or have led to less public accountability and access.
- Negotiators may place additional limits on government involvement with the service sector by further restricting public subsidies and controlling the way governments purchase services for their own use. Without adequate safeguards, these new rules could subject public grants, loans, tax incentives, and other aid to challenge, and they could threaten responsible contracting rules and living wage laws.
Given these potentially serious and far-reaching consequences, negotiations should be suspended until a full and open assessment of the GATS is completed. This assessment must address how the GATS negotiations will affect the economic and social development of poorer countries, the provision of public services, the use of government subsidies and responsible procurement policies, the effective regulation of services, and the protection of workers' rights, the environment, and human rights. It must include the WTO, UN agencies including the ILO, elected representatives and regulatory agencies of the WTO member governments, academics, trade unions and other civil society groups from around the world. The assessment is necessary to guide negotiators in their work and to enable politicians and the public to provide educated input into these negotiations.
As a condition of future GATS negotiations, the GATS, like all trade agreements, must include enforceable commitments to protect workers' rights and the environment. No company or country should be allowed to benefit from GATS rules if it violates the core labor standards, which are defined by the International Labor Organization to include freedom of association, the right to organize and bargain collectively, and prohibitions on child labor, forced labor, and discrimination in employment. Service sector workers are among the most poorly paid in the world, they are more likely than workers in other sectors to be women, and they receive fewer benefits and enjoy less job security than other workers. Like all workers, they must be able to freely exercise their fundamental rights if the benefits of increased trade and investment are to be broadly shared, and if the global economy is to work for working families.
In addition, we oppose any expansion of the GATS until the following guarantees are fully incorporated into the agreement:
- All essential public services, like health care, education and utilities - including public services provided in competition with the private sector - must be clearly excluded from the GATS. The United States must not use our negotiating leverage to convince other countries, especially developing countries, to make WTO-enforceable commitments to privatize their essential services. Countries must be free to reverse any existing commitments to privatize essential services if they determine that it is in the public interest to do so. Rules on subsidies and procurement must fully protect the ability of governments to support and purchase services in ways that promote economic development, social justice and equity, public health, environmental quality, and human and workers' rights.
- Guestworker programs too often are used to discriminate against U.S. workers, depress wages and distort labor markets. Meanwhile, the proliferation of these programs has resulted in the creation of a class of easily exploited workers who cannot fully exercise their fundamental rights. Before any new commitments on temporary entry are made under the GATS, these programs must be reformed to include more rigorous labor market tests, involve labor unions in the labor certification process, and guarantee the same workplace protections for temporary workers that are available to all workers.
- The GATS must allow governments to regulate foreign investors and other service providers to fully protect public health and safety, consumers, the environment, and workers' rights. Currently, GATS rules on domestic regulations might be based on the so-called "necessity test," which bars any regulations that are not absolutely necessary - from the WTO's perspective - to ensure the quality of the service. This test does not adequately balance the public interest against private interests, and it provides a completely unacceptable foundation for disciplining government regulations.
- A number of service sectors should be excluded from the GATS entirely. Some of these sectors, such as maritime, air transport, trucking, and other transportation services, should be exempt because of the need for adequate government regulation of these sectors. The current GATS exemption for air transport services should also be maintained because the current well-developed legal framework for negotiating air service rights is likely to provide superior benefits to United States interests than would the GATS.
- Other sectors that are heavily regulated because they are natural monopolies or have an inherently social component, such as postal services, utilities such as water, energy, and sanitation, corrections, education and child care, and health care, should also be exempt from the GATS. Potential liberalization of these sectors must be debated amply in the domestic political arena, including at the state and local level, and not locked in through international trade negotiations.
Finally, the WTO must also become more open to the public: draft negotiating positions and other country documents, along with the WTO's own documents, must all be available to the public. And even the best set of GATS rules will not provide much comfort to workers and their families until the WTO dispute resolution process becomes more transparent and allows the participation of interested stakeholders such as trade unions and other civil society organizations.
Unless and until these socially responsible objectives are satisfied, and the GATS reflects the interests of working people and protects the environment and public health - and not simply corporations - the AFL-CIO joins our brothers and sisters and other concerned organizations around the world in opposing the GATS negotiations.