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Most Significant Leak Since The MAI

20 April 2002

In the most significant leak since the Multilateral Agreement on Investment was exposed to public scrutiny in 1997 and eventually sunk, drafts of the European Union's 'requests' of other countries in the WTO services negotiations have just been posted on a European website (www.gatswatch.org).

The document makes across the board demands that 29 countries open up their postal services, water supplies, finance and banking, electricity generation and supply and telecommunications services to European transnational companies.

The EU also wants all these countries to lower or abandon their vetting of foreign investments in all services sectors. Coming at a time of mounting protests against privatisations of water, electricity, prisons, health services, education and more, the documents have provoked outrage throughout the world.

The EU's specific "requests" of New Zealand (see www.arena.org.nz) include:- removing the requirement for Overseas Investment Commission approval of foreign investments in services, including purchase of rural land;

- removing the right to prefer local purchasers in any future privatisations, such as NZ Post, TVNZ, Kiwibank or universities;

- not giving preference to New Zealanders engaged in research and development work in natural sciences, social sciences and humanities and interdisciplinary areas, including rights to government subsidies;

- no limits on security operators, such as private prison companies, in establishing their businesses, buying land or having full control of such activities;

- committing postal and courier services to full, private international competition and ownership

- removing the limit on any single overseas company owning more than 49.9% of Telecom

- no restrictions on foreign ownership or access to contracts for water collection, purification or distribution, waste water, refuse disposal, sanitation

- no preference for local owners or providers of maritime transport and port services, rail transport maintenance, air transport sales and marketing and ground handling.

This comes on top of the US hit list of services they want opened to free trade rules that was released last week. US targets include the new 'light-handed' telecommunications regulations and the current Government's policy to impose local content broadcast quotas, already on hold as a result of commitments the National government made under GATS in 1994.

"Trade Minister Jim Sutton and the Government only ever talk about the holy grail of free trade in agriculture. It's time they started to explain to people what the implications of these services agreements are for the rights of New Zealanders to control what happens in our country'," said Professor Kelsey.

The Europeans' demands are the latest stage in controversial negotiations to expand the existing coverage of free trade rules to more key services and extend those rules. Known as the General Agreement on Trade in Services or GATS, these rules limit the right of central and local governments to protect their domestic services and put the interests of foreign investors ahead of people's right to affordable, quality public services.

The Doha ministerial meeting of the WTO last November ignored concerns from the UN subcommission on Human Rights about the implications of GATS for human rights, and demands from poorer countries to assess the impacts of the agreement so far, when it set June this year as the deadline for countries to table their demands of other countries.

"This leak confirms what ARENA and many international critics have claimed: that the GATS is a Trojan Horse for the takeover of core public and essential services by transnational companies aligned with the EU and US", said Professor Jane Kelsey on behalf of the Action, Research and Education Network of Aotearoa (ARENA). "Once commitments are made, governments can only change their minds at a price which almost none can afford".

"The backlash we are already seeing from these documents is another nail in the coffin for the WTO's attempt to dictate how governments meet their people's needs' said Professor Kelsey.

Ends

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