REPA Booklet - Stop Epa

31 Services
“Countries are
having real
difficulties trying
to develop free
trade rules among
themselves and
the attempt to
open up trade for
services is
ridiculous.”
(Grant Percival,
Samoa Association
of Manufacturers
and Exporters,
2004)
Do the Pacific Islands have to negotiate with the European Commission over services?
The Commission wants negotiations on services, not because its firms want to invest in the Pacific, but to
establish precedents that advance its WTO negotiations, especially in the maritime and telecom sectors. But
there is no obligation in Cotonou to do so. Article 41 says the objective is to cover services after countries have
acquired some experience in applying the WTO rules under GATS. Few Island governments have any such
experience. Only three are WTO members and even they have made only minimal commitments. The rest
have no experience of such rules – except Vanuatu, whose government decided not to join the WTO when it
realised the commitments it had offered in education, health, environment, audio-visual, retail and wholesale
distribution services went too far.
Aren’t services supposed to be included soon under PICTA?
The Forum Trade Ministers have agreed in principle to proposals from the Secretariat’s consultants that they
should include GATS-style rules under PICTA. Each government is meant to choose four of seven services –
finance, maritime, air transport, telecommunications, health, education and environment. Even though these
services form essential parts of social life, the Forum doesn’t intend conducting any social impact studies before
governments make these decisions, and individual Islands don’t have the resources or expertise to do so.
National consultations were supposed take place in 2004, with recommendations to the Forum Trade Ministers
in 2005. But few people know anything about them. It seems that some governments now want the proposal put
on hold.
What are the risks of signing a GATS-style agreement?
These agreements are designed to stop governments from limiting the kind of services that foreign investors can
control and from giving preferential treatment to local providers of services. They also restrict the kind of
regulations that governments can use to protect social, economic, cultural and environmental interests. An
agreement with the Europeans may or may not require a Pacific Island government to change its current laws
and policies, especially if it has already commercialised or privatised those services, but it would prevent future
governments from stepping back in if things went wrong.
Wouldn’t competition help deal with inefficient state monopolies over telecoms or electricity?
In most Islands opening these services to foreign firms would mean replacing public monopolies with private
ones, unless governments could devise regulations that limit profiteering and protect people’s access to affordable
quality services. Trade in services agreements try to stop governments from using those kinds of regulations.
The answer may well lie in taking a regional approach to shipping, air transport and telecoms; but a free trade
agreement isn’t the answer.
So why do the Pacific Island want to negotiate on services with the European Union?
This is another part of the strategy to avoid PACER. They are also relying on simplistic consultancy reports that
suggest the Islands might attract new foreign investors by locking in their commitments to a market model. Yet
even The Way Forward acknowledges that Samoa has implemented strong neoliberal policies, but has still not
attracted foreign investors because of its remoteness, small scale, transport services and poor infrastructure. As
the European Commission points out, its firms are hardly lining up to invest in the Pacific for those reasons. So
an agreement on trade in services would not solve their problem.
Are there specific services commitments that the Pacific Islands want from the Europeans?
Like many other ACP countries they see services as the way of replacing the loss of jobs in industry and
agriculture. Along with the Caribbean governments, the Islands want the Commission to make commitments on:
1. tourism; and
2. the right of Pacific Islands people to work in Europe on a temporary basis.
These are specified in their negotiating strategy. Many African governments are more cautious, largely because
of education campaigns by local NGOs. They are concerned that the Pacific and Caribbean approach will see
them pressured into negotiations on services which they don’t want.
62
A People’s Guide To The Pacific’s Economic Partnership Agreement