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
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.