Alert on GATS article 13 : Local governments targetted by the WTO

Original Publication Date: 
2 Dicembre, 2004

Press Communique 2

The higly technocratic revision of the General Agreement on trade in Service could entail an unpleasant surprise. Behind the backs of elected assemblies, a world wide « liberalisation » of governement procurement in services is being projected. The Geneva working group on GATS rules is planning to have Ministers at the WTO Hong Kong conference, adopt an Annex to GATS article 13 on Government Procurement.

The stakes are enormous. For the third World countries in the first place, a vast majority of which refuse to open their government procurement prey to Northern TCSs appetite. At the Cancun ministerial, they officially obtained the abandonning of the negotiacions on the A greement on transparency in goverment procurement.

Secondly, all countries North and South are concerned. Government procurement policies, wether at central, regional or local level, are a matter of political criteria and choices. They have implications on local employment, quality in services, access to these services ( affordability and geographic availability). If « gouverner, c’est prévoir » ( to govern is to forsee) then, governmnt procurement policies are an essential part of any political and societal project.

To recognize there needs be rules for Government Procurement, including in services, is one thing. That an non elected working group of the WTO should elaborate the rules fot the whole world is another. What rules ? Applying to which sercices ? And what about specificatons ?

If the concocted Annex was to be adopted, local governments the world over would be submitted to drastic disciplines. At central, but also regional and municipal level ( GATS art 1.3), they would be compelled to :

- Publish international tenders for all procurement « markets» above the very low level of 200 000 SDR.

- Notify on a regular basis the totality of their government procurements expenditures.

- Draft and publicise their tenders in strict conformity with the disciplines set forth in the Annex to art 13. For fear of sanctions, they could be constrained to limit their pretensions to affordable and quality services.

On the other hand, transnational services operators who would deem their market opportunities frustrated, could bring their cases directly in front of regional courts. According to article 6-2, the later would have to conform their rulings with the new GATS rules.

Last but not least, between public( government) procurement in services and public services « markets » definitions are dangerously blurred. Work under way around a Reference Document to the Annex of article 13 points to semantic contorsions with serious juridical implications. They refer to disciplines on « non-discriminatory access to limited public ressources », « limitations in obligations of universal service » and promotion of international norms and international norm setting bodies ».

Secret trade weapon pointed at Southern countries, GATS article 13 is also tantamount to a declaration of war on the prerogatives of local governments around the world.

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