Local
Government
By Alan Griffiths
Two years ago the MAI (Multilateral Agreement on Investment) was defeated
in the OECD (Organisation for Economic Cooperation and Development). OECD
Secretary General Donald Johnston said there were lessons to be learnt for
the World Trade Organisation (WTO) from the failed MAI negotiations at the
OECD. He believes that the pressure brought to bear on governments by civil
society was the single most important reason for the ceasing of the MAI negotiations.
The
Victorian Local Government Association led the call for its city council members
to oppose the MAI. Now the MAI is back at the WTO under a different agreement
known as GATS (General Agreement on Trade and Services). The WTO web site
says:
‘The GATS is the first multilateral agreement to provide legally
enforceable rights to trade in all services... And it is the world's first
multilateral agreement on investment, since it covers not just cross-border
trade but every possible means of supplying a service, including the right
to set up a commercial presence in the export market.’
How
will this change Local Government?
Local
government will no longer be ‘democratically accountable’ to their constituents
nor responsible with the allocation of ratepayers funds to serve the needs
of their community, ahead of new rights for foreign corporations.
This
is because of the National Treatment clause that has yet to be implemented. Under
National Treatment, foreign service
providers
will enjoy the same rights as local providers, especially in
regards to the establishment; application for financial assistance, subsidies
or tax breaks; operation and guaranteed continued access. GATS is designed
to cover:
·
Cross-border trade.
Services spanning across the borders of all 136 members of the WTO from one
territory to another, ie. International air transport, electronic commerce
and transnational education.
·
Consumption abroad
– service consumers using the service from another country, ie. Education.
Overseas students, the consumers, use Australian Education services.
·
Commercial presence
ensures the right of market access for any investor in any WTO member country
to establish a commercial presence in the services field, ie. foreign owned hotels, hospitals, universities
and /or utilities, etc.
What is defined as a service?
·
Distribution including
wholesale, retail and franchising.
·
Construction,
buildings, architecture, decoration, maintenance.
·
Civil, mechanical
and other types of engineering.
·
Financial services,
banking and insurance.
·
Research and development.
·
Real estate.
·
Rental, credit
and hire purchase.
·
Postal services,
telecommunications or audio-visual.
·
Tourism, travel,
hotels, restaurants.
·
Environmental
services, including road construction, maintenance, rubbish collection and
sewerage disposal, delivery, protection of the landscape and urban planning.
·
Recreational,
cultural and sports services including entertainment, library, archives and
museums.
·
Publishing, printing
and advertising.
·
Transportation
by every imaginable conveyance.
·
Education – primary,
secondary, tertiary and adult
·
Human and animal
health
What
activities will GATS challenge, eg:
·
programs earmarking economic development
funds, loans or subsidies for local businesses, women, indigenous and/or cultural
activities, etc;
·
share allocations to local residents
or consumers, with special ownership restrictions on local government enterprises
or activities which are privatised or contracted out;
·
preference to local companies to
run roads, rubbish, recycling, buses, community services etc;
·
allocation of contracts without
full competitive international tender;
·
cancelling proposals to contract
out activities (eg due to local pressure not to go ahead with a privatisation)
unless compensation is paid to potential overseas investors for costs already
incurred from lost opportunities;
·
imposing new regulations on prices
or shareholdings because of the exploitative behaviour of a foreign investor.
This would be seen as taking away or “expropriation” of potential profit,
and full compensation would be required;
·
zoning changes that could restrict
the use of land including historic designation.
Why haven’t I been consulted?
Australia’s
Department of Foreign Affairs and Trade (DFAT) are negotiating GATS on our
behalf. DFAT promised to consult with Local Government. This hasn’t occurred.
Your local city council is obligated to protect your rights.
State
and local governments are not ‘parties’ to the GATS, yet are subject to the
full extent of the obligations. The current GATS proposal will make national
and local governments and their equivalents elsewhere automatically bound
by the GATS once their national governments have signed.
What
can I do?
1.
Demand that your city
council take immediate steps to protect you, ie. Australia can place an open-ended
exemption on all local and state governments to protect its communities ahead
of the rights of corporations.
2.
Meet or call your
local city councillor and demand to know what is going on?
3.
Write a submission to the Joint
Standing Committee on Treaties inquiry into Australia’s
relationship with the WTO. www.aph.gov.au/house/committee/jsct
4.
Contact Alan Griffiths at Vic WTO
Watch at