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Text Of Nick Kelly's Banned GATS Leaflet

This was the text of the leaflet I wasn't allowed to take into the Labour conference:

The GATS (General Agreement on Trade and Services) is a trade agreement that is run and policed by the WTO (World Trade Organisation). All 143 countries that belong to the WTO are in the GATS agreement, an agreement whose purpose is to liberalise and expand international markets in services.

In 1994 the Uruguay Round of trade liberalisation negotiations concluded. Countries were encouraged to include as many of their services under the GATS agreement as possible. The previous National government (who were in power during these negotiations) went further than any other OECD country. That included making New Zealand¡¦s education services subject to the GATS agreement.

What this in effect means is that the New Zealand education policy is bound by an international trade agreement. This applies to all levels of the education system from primary to tertiary. Although it currently refers only to private education that means little in New Zealand, given that private tertiary providers enjoy similar subsidies to public ones and our education system runs on the basis of open competition. Our country¡¦s universities now waste millions on advertising and marketing, whilst lecturers are now underpaid and education quality is at risk of slipping.

GATS means the New Zealand government cannot intervene in the education system in ways that might disadvantage foreign private providers. For example the total number of universities cannot be limited because of GATS. If a private provider from overseas wishes to set up a university in New Zealand, the government has no right to say no under GATS, subject only to the very weak Overseas Investment Commission rules. Also private education providers are entitled to the same subsidies as local private providers under GATS. If the government decided to ignore the rules of the GATS agreement, it could end up being taken to the WTO and being forced to back down or else face sanctions.

The following would be considered trade barriers under the GATS: „« Limitations on the total number of service providers (Universities, Training Colleges etc) „« Limitation on the total value of services, transaction or assets „« Limitations on the total number of service operations or the total quantity of service output „« Limitation on the number of persons that may be employed in a particular sector or by a particular supplier „« Measures that restrict or require supply of the service through specific types of legal entity or joint venture (eg schools or colleges of education); and „« Percentage limitations on the participation of foreign capital, or limitations on the total value of foreign investment.

It is absolutely vital that this Labour led government remove our countries education services from the GATS agreement. This government should make public education its priority, and attempt to improve the quality of this sector. It can only do this by removing education from the GATS agreement. Education is a public good for the benefit of our society, not a commodity to be bought and sold at the mercy of the international free market.

Since coming to government in 1999, this Labour led government has supported Globalisation and international trade liberalisation ¡V in other words, the same old Neo-Liberal policies pushed by Douglas and co and still being pushed by a number of western governments and international organisations like the WTO, IMF and the World Bank. Globalisation is the term used to describe their economic ideal, where we live in an international free market ¡V with as little government or state intervention in the economy as possible. 30 years ago the poorest 20% of the world¡¦s population accounted for 2.3% of private consumption expenditure; 30 years later the poorest 20% now account for only 1.3% of private consumption expenditure. Meanwhile the top 20% consume 86% of private consumption expenditure (much higher than 30 years ago). In the last 30 years the policies of Neo-Liberalism and Globalisation have been imposed upon the world¡¦s people, and perpetuated the gap that exists between rich and poor. Globalisation has caused massive job losses in the western world, and at the same time massive wealth losses in the 3rd or developing world. Many now compare the current Globalisation policies with the policies of Imperialism in the 19th and 20th century, as the economic effect is very similar.

One of the main ways the current government has supported the Globalisation process is by trying to get Free Trade agreements with a number of trading partners. The first of these was the Singapore deal. While National had begun work on the deal, Labour when in office continued to negotiate as if there hadn¡¦t been a change of government. This deal was described as the ¡¥Trojan horse¡¦ and expected to be the 1st of many such deals. Since last year the MFAT have been negotiating a Free Trade deal with Hong Kong, which was originally to be signed before the end of last year. By March of this year it seemed as though the wheels had come off the negotiations when Jim Sutton put out a press release saying ¡§New Zealand has told Hong Kong that it cannot accept a trade agreement with unenforceable rules of origins¡¨. The concern was that goods ¡V in particular textile goods could be produced in China (a country with a reputation of bad labour standards which hasn¡¦t recognised a number of ILO international labour rules) and smuggled into Hong Kong (as since 1997 Hong Kong has been part of China). If that happened the New Zealand textile industry would be wiped out, putting 20,000 people out of work.

A number of people argue that Free Trade is OK as long as there are good rules of origin and social clauses. This is wrong as social clauses and rules of origins are usually unenforceable ¡V as is the case with Hong Kong. And they fail to address the deeper problems with the economic model that these agreements implement.

At the moment it looks unlikely that a Free Trade deal will be signed with Hong Kong. However there is a real risk that the negotiations will be closed down for election year and then quietly brought to a conclusion after the election. Meanwhile the government seems determined to shift its focus onto negotiations with the US and make trade-offs to get on side with the Americans ¡V as if there is not enough evidence to show that this is pure fantasy.

Instead of signing Free Trade agreements, the current government should be looking at ways to develop the New Zealand economy, and in developing jobs and wealth for this country. Free Trade and Globalisation undermines any attempt at doing this.


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