WTO Tidbits

1) The European Union wants the GATS "necessity test" redefined The necessity test is considered to be one of the key themes of the Work Group on Domestic Regulation, which is endeavouring to make progress on the "unfinished work" of the Uruguay Round as concerns establishing GATS rulings. The requirement contained in Art.VI/4 of the GATS, on domestic regulation, has been the subject of an EU communiqué which expresses the need to redefine this clause. Art.VI/4(c) demands that where internal rulings covering requests for licences, technical norms and qualification requirements are concerned, disciplines should be introduced so that these internal rulings do not constitute "non-necessary" obstacles to trade in services. This concept is horizontal in nature, meaning that it can be applied to all sectors. To evaluate the trade impact of a domestic regulation coming under Art.VI/4, the EU brings in the concept of "proportionality", which it already uses in other fields. According to this principle, a particular measure should not be considered 'more than necessarily restrictive to trade' so long as it is proportionate to the long-term aim. It follows that, while the authorized degree of trade restriction depends on the importance of the particular aim pursued, the validity or otherwise of this political objective should not enter into consideration. In the language of the text, the description of a "necessity", according to the EU, should be: "no more cumbersome than necessary" or "no more restrictive than necessary", rather than "the least restrictive to trade". This last formula, according to the EU, "sets inconsiderate limits on the choice of available regulatory instruments." GATS & Democracy: an Australian viewpoint ____________________________________________________________ by CloudCatcher

Now I know that most of us find all this stuff about the mechanics of trade unbelievably boring. But please bear with me, because it is important that we understand how the system works if we are to have any chance of changing it. Those of you who are following the trade debate closely will know that George W in the US is pushing very hard for 'fast track '. This fast-track authority, now re-named ``trade promotion authority'' allows the president to negotiate trade agreements with foreign governments without their being subject to amendments by Congress. Congress' role is limited to a final yes-or-no vote. President Bush, Snr. had fast track at his disposal as did his predecessor,and this was of enormous assistance to the US in its negotiations on the setting up of the WTO in 1995. In 1997-98 (prior to the Seattle Ministerial) Fast Track was defeated by grassroots opposition, and getting it re-instated will be very difficult for the same reason. Here in Australia, guess what? We have gone one better than the Americans and here in Australia, we have (and always have had) SUPER FAST TRACK. The trade negotiations here are carried out by bureaucrats in the Dept of Foreign Affairs and Trade. Presumably, there is input into this process by the Minister of Trade, though details about this are sketchy. (And remember that it is the function of officials in DFAT to advise the relevant Minister) Those of you who were involved in the fight against the MAI will remember that when the MAI document was leaked and an inquiry was held, it was discovered that officials from the Treasury had been working on this MAI Treaty at the OECD for some years (which, incidentally, involved regular overseas travel to exotic European locations), and no-one in Government, from the Treasurer down, knew anything about it. How true this is of trade negotiations at the WTO, we do not know. So DFAT does the negotiating and at the end of the negotiating process, the Trade Treaty must be tabled in Parliament for 15 sitting days.This does not mean that anyone in the Parliament actually READS the document...just that it is tabled. The Joint Standing Committe on Treaties examines all Treaties, including trade treaties, and can make recommendations. However the government is under no obligation to act on any of these recommendations. The Treaty then goes to Cabinet and is rubber stamped. At no time is there any Parliamentary debate on the contents of the Treaty, and the Parliament is not even given any opportunity to vote yes or no, never mind suggesting any amendments. Thus, here in Australia, the democratic process is by-passed and this may help to explain why there is so little public and media debate about these free trade Treaties which have such an enormous impact on the way we live and work in this country. It also helps to explain why successive governments have been able to take Australia further down the path of trade deregulation than almost any other country. If you think that this is unacceptable, please think about contacting your Federal member and saying so. But democracy is under threat (both here and around the world) from another source. As you will see from the following article, the GATS is a major assault on democratic processes around the world. Whereas the barriers to free trade in manufactured goods are largely tariffs ( and here I must note that Australia has cut tariffs more deeply than any other developed country...SUPER FAST TRACK in action), the barriers to trade in services are government laws and regulations. Existing laws and regulations will be open to challenge by any of our trading partners as 'being unnecessarily trade restrictive', and future laws and regulations will have to be framed in the 'least trade restrictive' way possible. Thus the GATS will shrink the legislative choices available to democratically elected governments around the world. (And remember this will apply to legislation at all levels of government--local, state and federal)