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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


Suez strikes back in Bolivia
Bolivia faces an impending lawsuit for cancelling the water contract with Aguas del Illimani, the private consortium controlled by majority shareholder Suez. Thanks to a bilateral investment treaty signed between France and Bolivia, Suez has the right to sue the Bolivian government for breach of contract.
Recent FTAs of the US as illustrations of their new strategy for the audiovisual sector
US trade strategy is shifting: USTR may be willing to make concessions to countries that want to require local content or ownership in ’traditional’ AV sector, ie film and radio; however, no such requirements will be allowed in the category of ’electronic commmerce.’ This is because USTR (and MPAA) expect all cultural content (films, television, music) to be transmitted digitally in the near future.
Divide and conquer: The FTAA, US trade strategy and public services in the Americas
Documents the progress of “competitive liberalization,” a strategy advanced by the United States Trade Representative to establish a network of bilateral international trade agreements as steps toward the multilateral GATS agreement.
Australian Bilateral Agreements and Higher Education
Australia is a party to a number of bilateral agreements with developing countries in the East Asian-South Pacific region. The agreements fall into two categories: comprehensive bilateral free trade agreements (BFTAs) and bilateral investment agreements (BIAs). Both types of agreements have implications for higher education, though only BFATs expressly deal with education services.

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  • 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.