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GATT Watchdog Issues GATS Fact-sheet

There is growing awareness about the impact of international trade and investment agreements on the health sector. The 142-member World Trade Organisation (WTO) oversees 28 agreements which set the rules for international trade. The General Agreement on Trade in Services (GATS) has particularly alarming implications for the future of health care and the delivery of basic services.

By making specific GATS commitments, governments limit what current or future governments can do in a particular service sector. At present the rules only apply to services which a government has indicated it is prepared to open up to foreign competition. A new round of GATS talks is currently underway and governments are being pressured to extend their commitments to as many sectors as possible. They’re also being asked to accept ‘disciplines’ on the domestic regulation of services, and bring services that are publicly owned and/or ‘procured’ by government agencies under the rules.

In particular the WTO Secretariat wants them to reconsider the “depth and breadth of their commitments” on health and social services, which it says are “trailing behind other sectors” in the rate they are being listed under GATS. New Zealand has had over a decade and a half of failed free market experiments with health (and other) services. In 1999, many voted for policies that would see an end to this narrow market approach. But GATS promises even more of the same ‘private profit before people’ formula.

The GATS rules

GATS has 3 basic rules:
1) a government can’t treat service suppliers from one WTO country better than those from another

2) it can’t give better treatment to its locals than it gives to foreign suppliers in the services it has agreed will be covered.

3) it can’t limit the access of foreign suppliers to its market in those services by imposing limits on the total number of facilities and providers, requirements for local content or local hiring, local community involvement and so on.

GATS threatens to restrict a government’s ability to ensure access to affordable, adequate basic services by prohibiting any restrictions and internal government regulations in the area of service delivery that might be considered “barriers to trade”. Government regulatory measures that even indirectly or unintentionally affect the conditions of competition of international service suppliers could be challenged at the WTO. Enforceable dispute mechanisms could see economic sanctions used against governments judged to be in breach of GATS.

The privatisation agenda:

To many transnational corporations (TNCs) health care is merely a lucrative market which they want to control. Non-commercial functions of public services designed to meet social, environmental, Treaty of Waitangi or cultural objectives are irrelevant to them and under GATS may be seen as “barriers to trade”.

GATS is a backdoor to more privatisation. Public services, especially health, are a big part of government spending. Pharmaceutical, insurance and health care companies are lobbying hard to open them up to private, and foreign, suppliers. Through GATS they hope to expand and lock in the opportunities being opened up by the commercialisation and privatisation of health care in many countries.

The WTO denies that privatisation is on its agenda and says that services purchased under government authority are excluded from GATS. But that does not apply to services that have any commercial element (like user charges for health care) or that are offered in competition with private suppliers. When governments contracts out any part of their health services (eg. Plunket or blood testing) or private companies supply services also provided by the government, whether for profit or voluntary (eg. private hospitals or nursing homes existing alongside state ones), then a WTO dispute panel could say these are no longer government services and are subject to GATS - and subject to competition from overseas operators.

The UN Covenant on Economic Social and Cultural Rights sees health as a basic right: - “all people have the right to the highest attainable standard of health…as a prerequisite for the full enjoyment of all other human rights” Internationally, many trade unions, non-governmental organisations, public health advocacy groups, health professionals and others see GATS as a grave threat to health care. Public Services International (PSI) says: “The elite will be able to access private TNC-controlled care; the rest will have to make do with the shrinking public system”

We can already see the effects of that two-tiered healthcare system in New Zealand, and related threats from commercialisation and privatisation to affordable safe drinking water, electricity supply, food safety, road and rail safety, air quality, drainage and sanitation. Expanding GATS to health (and environmental) services will make things even worse, and limit the policy options available to current and future governments which want to abandon the market model.

The US Corporate Agenda

Through GATS, US health care corporations want:

a) more privatisation. The powerful industry lobby group, US Coalition of Service Industries told US Congress: “public ownership of health care has made it difficult for US private-sector health care providers to market in foreign countries…”

b) to be able to provide health care services across the border through means like telemedicine

c) majority foreign ownership of health care facilities, especially in the “entire spectrum” of geriatric services which they view as a lucrative growing market

d) “pro-competitive” regulatory reform to address “restrictive” licensing requirements for health professionals and “excessive” privacy and confidentiality regulations over patient records.

US negotiators, reflecting industry positions, have made health care a special target: “The United States is of the view that commercial opportunities exist along the entire spectrum of health and social care facilities, including hospitals, outpatient facilities, clinics, nursing homes, assisted living arrangements, and services provided in the home.” The US healthcare sector wants access to “rapidly expanding health care expenditures in many developed countries” experiencing “an increase in their aged population”.

An Assault on Public Health

Allyson Pollock and David Price, in The Lancet (Vol 356 December 9 2000) write:
“The new criteria proposed at the WTO threaten some of the key mechanisms that allow governments to guarantee health care for their populations by requiring governments to demonstrate that their pursuit of social policy goals are least restrictive and least costly to trade.”

Geof Rayner of the UK Public Health Association says: “a market-based approach to health not only drives up the costs of health care, but it can also lead to disinterest in the factors that make people ill. A consumer society promises - falsely - that medical technology can fix diseased individuals, and that good health can be bought and sold in the marketplace rather than being something to promote or work for”.

Health workers’ wages are also under the GATS gun. The WTO claims that the biggest benefit of freer trade is through opening up services jobs to foreign workers. “The most significant benefits from trade are unlikely to arise from the construction and operation of hospitals, etc, but their staffing with more skilled, more efficient and/or less costly personnel than might be available on the domestic labour market”.

New Zealand has among the most wide-ranging GATS commitments of any WTO member. The Labour/Alliance government says that free market forces can’t be left to rule, yet is deeply committed to free trade and investment. It has never conducted a cost-benefit analysis on the impact of GATS. In its free trade and investment agreement with Singapore it made new bilateral commitments which cover dental services, ambulance services and residential health facilities other than hospital services. These go further than existing GATS commitments. It commits the two governments to open all services by 2010. The agreement being negotiated with Hong Kong is likely to do the same. A document submitted by the New Zealand government to the WTO Council for Trade in Services in June 2001 stated: “First and foremost, New Zealand will actively encourage Members to explore ways in which existing commitments in all services sectors, in terms of both market access and national treatment, can be progressively liberalised.” This implies that the government is prepared to extend its own commitments to all servies - including all health, education and water services.

Health care is a fundamental human right - NOT a tradeable commodity!

What you can do:

* Copy this factsheet and circulate it

* Talk to your workmates family and friends about this issue

* Ask candidates for your local District Health Board to take up the issue of GATS and health

* Write to, or visit your MP and ask them to make a stand against GATS

* Promote debate in your union about GATS, free trade and health - encourage them to oppose GATS

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