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Services

The international trade in services is big business, comprising between half and three quarters of all economic activity in richer and poorer countries. This is a lucrative market which the world’s transnational corporations want to control. They want services to be treated purely as commodities to be bought and sold in a competitive market.

Services have been described as anything that you cannot drop on your foot, including banks, education, energy, healthcare, water, rubbish collection, libraries, railways, airlines, tourism, TV and radio.

Under the WTO’s GATS (General Agreement on Trade in Services), and the services provisions in bilateral and regional free trade agreements, governments agree to open the economy to foreign suppliers of certain services. In those services, foreign suppliers must be given at least as favourable treatment as it gives to local suppliers. Governments cannot set limits on the numbers of service suppliers operating in its market or impose requirements for local content.

Free trade in services threatens to restrict a government’s ability to ensure access to affordable, adequate basic services for all its citizens by removing any restrictions and internal government regulations in the area of service delivery considered to be "barriers to trade". These include measures which pursue environmental, social or community objectives.

Services liberalization provisions of bilateral FTAs often go further than governments’ GATS commitments. For example, while Australia excluded water ‘services’ from its GATS offer, this is included under its FTA with the USA, opening up Australia’s water resources and utilities to US-based TNCs.

last update: May 2012


Taking the credit - how financial services liberalisation fails the poor
The report looks at how financial services liberalisation, and especially the entry and ongoing presence of foreign banks in the global south, as promoted at the World Trade Organisation and through European bilateral trade deals, leads to the prioritisation of richer customers and larger companies resulting in poorer customers losing out.
Brussels pushing finance deregulation in third world
While EU and other global leaders have talked tough about re-regulating the financial sector in the wake of the economic crisis, they remain committed to pushing through banking deregulation in the developing world via trade deals.
Education outcomes of the ASEAN-Australia-New Zealand FTA
Normally the services chapter of an FTA covers movement of persons from one country to another in order to supply a service. This FTA is unusual because it contains both a chapter on trade in services and a separate chapter, and accompanying schedule of commitments, in respect of the movement of natural persons.
Serving whose interests? The political economy of trade in services agreements
There is a fundamental contradiction between the global market model and the intrinsically social nature of services
Costa Rica: CAFTA threatens to turn water into merchandise
Free trade agreement will make water distribution more unequal for country’s poorest communities. The pact sets the obligation to give a “not less favorable” treatment to US companies, ignoring the deep differences in size and economic power of between these ones and the national sectors.
Legal and development implications of inclusion of services in the EPAs
South Centre has issued a policy brief "Why inclusion of services in the EPAs is problematic" which analyses legal and development implications for Eastern and Southern African countries in negotiating trade in services under the EPAs.
Woolf lobbies Brussels on Asian liberalisation
Law Society president Fiona Woolf is visiting Brussels today to lobby the European Commission on the liberalisation of legal services in Asia.
Unbundling water from land
In excluding water from GATS but not from the Australia-US FTA, we have simply swapped one lot of water lords for another.
Services liberalization in the new generation of Preferential Trade Agreements (PTAs): How much further than the GATS?
A comprehensive overview of services liberalization commitments in the new generation of preferential trade agreements as compared to prevailing GATS commitments and Doha Round offers.
Private rivers: Will transnational water companies swallow El Salvador’s water supply?
CAFTA creates a new legal framework for the sale of water and other public services, although it allows countries to "opt-out" of the public services of their choosing. El Salvador’s President Tony Saca chose no service exemptions, and thus opened the entire water sector to competition by international corporations.

    Links


  • Coalition of Service Industries
    CSI is the leading US business organization dedicated to the reduction of barriers to US services exports, and to the development of constructive domestic US policies, including tax policies, that enhance the global competitiveness of its members. Website covers bilateral FTAs.