Quietly trading away our rights

Original Publication Date: 
19 December, 2005

The deal patched together at the World Trade Organisation Ministerial meeting in Hong Kong at the weekend is widely seen as a face saving exercise designed to save the talks from collapse. And there is doubt that the many remaining areas of disagreement can be sorted out by the target date of the end of next year.

Officially, the agreement delivers gains for developing countries, especially the prospect of ending the unfair agricultural export subsidies in the EU and US by 2013. But this promise may not be delivered, as it is conditional on finalizing agreements in a number of other areas. And with agricultural subsidies, there are any number of ways these rules could be gotten around in the future.

Still, in return for this conditional promise on agriculture, developing countries agreed to cut tariffs on industrial goods imports resulting in steeper tariff cuts for them than for wealthier countries. Even the tariff-free access for exports from the poorest, least developed countries is hedged with exceptions, and the aid package included in the deal is mostly rebadging of existing aid.

And largely hidden from view is the fact that the deal over trade in services makes a major change that was opposed by most developing countries, and could damage many industrialized countries like Australia.

The trade in services agreement under the World Trade Organisation is aimed at expanding international trade in commercial services. Until now, governments could choose which services would be included in the WTO agreement and most governments, including the Australian government, excluded essential services such as water, education, healthcare, public transport and postal services.

The reason for keeping essential services out of the agreement is to avoid them being opened to foreign competition and investment under WTO rules. Foreign companies would gain full access and treatment the same as existing operators, even in areas such as aged care, so that there could be no limits on numbers of service providers, and no preference for local service providers. The right of governments to regulate these services for equitable and affordable access would be reduced.

Under WTO rules, legislation and government policies on services can also be disputed by other governments on the grounds that they are barriers to trade.