Slouching towards Australian public libraries: the WTO General Agreement on Trade in Services.

The extensive reach of the liberalisation agenda of the world's primary multilateral trade institution, the World Trade Organization (hereafter WTO) combined with the rapid global proliferation of free trade agreements is contributing to the transformation of the Westphalian notion of state sovereignty and political organisation in liberal democratic states. Many of the WTO trade agreements that member states such as Australia commit to domestically have significant implications for Western liberal democracies whose political organisation have at their genesis the ballot box. At their core, these trade agreements attenuate the capacity of domestic governments to regulate policy, rendering nugatory the political influence of the citizen upon its democratic representatives. One controversial example of the potential transformative power of these global trade agreements is the WTO General Agreement on Trade in Services (hereafter GATS) and the implications of the agreement for public libraries.

Civil society has provided an important critique of the WTO, particularly of the far-reaching scope of GATS into areas of policy that have been traditionally the province of domestic governments, such as provision of education, water and health services. A key concern of many civil society (1) groups with GATS is the existence of an exemption provision that ostensibly precludes services that are provided in the exercise of governmental authority from the operation of the agreement. It is feared by many that the exemption will be read narrowly by the WTO so as to subject services provided in the exercise of governmental authority such as public libraries to liberalisation. To some extent these fears have been realised by a WTO directive that states the exemption will be construed narrowly. (2) It is the intention of this paper to provide a conspectus of GATS and outline the key concerns of its potential impact upon public libraries. Part I of this paper provides an overview of GATS, in particular, examining the public services exemption in Article 1.3. Part II considers the potential implications of GATS upon public libraries in Australia. In concluding, part III considers the broader human rights implications of GATS and the liberalising of services as has been highlighted by the United Nations High Commissioner for Human Rights and other UN human rights institutions.

Part I: The GATS: A Brief Overview

The WTO GATS is a framework agreement that was adopted during the Uruguay Round in 1994. GATS entered into force on 1 January 1995 and currently there are 140 WTO members that are committed to the agreement. Its drafting was 'largely due to the insistence of the United States that trade in services was placed on the Uruguay Round agenda'. (3) According to the former director of the WTO Services Division:

 
   Without the enormous pressure generated by the American financial 
   services sector, particularly companies like American Express and 
   Citicorp, there would have been no services agreement. (4) 

Thus from the outset GATS attracted public controversy and initiated 'much controversy and disagreement among other contracting parties [in the WTO], especially developing countries' . (5)

The controversy of GATS is foremost informed by its far reaching incursion upon state sovereignty and public policymaking. The WTO is regularly charged with suffering from a democratic deficit. (6) The perception that 'states are progressively losing their ability to decide for themselves their own policy directions and priorities' is recognised by the WTO. (7) Yet the WTO poses the question:

 
   Is the notion of 'sovereignty' real? Are countries and governments 
   in a global economy not obliged to subjugate some level of domestic 
   prerogative to international rules and disciplines? If so, is that 
   a gain or loss to the well-being of societies? In short, in the 
   context of the WTO, is complaint over 'sovereignty' a red herring 
   and a cover for justifying annoyance over the rejection of special 
   interest advocacy in the interests of a wider good? (8) 

Australia is no exception to the charge of democratic deficit when it comes to the negotiation of trade agreements. In Australia, entering into international agreements is an executive power under the Australian constitution. While significant agreements such as GATS are tabled in parliament, ostensibly for transparency reasons, and examined by the Joint Standing Committee on Treaties (JSCOT), public consultation on the text of these agreements and the implications of the agreement for the future of Australian democracy is negligible.

Germane to civil society concern about GATS is that the nature of the agreement targets domestic service markets. GATS is therefore of great importance to multinational corporations, as the significant proportion of trade in services occurs within domestic economies and these businesses generally do not trade across borders. Using Australia as an example, in 2001 Australian service exports were valued as $31 billion, an amount which accounts for 20.3% of total Australian exports. Services accounted for 76% of Australia's gross domestic product and the service sector employs 81% of the Australian workforce. (9)

Yet it is difficult for multinational corporations to participate freely in domestic service sector trade across borders because of the number of varying factors preventing their access, such as government ownership of service sectors, government regulation and administration laws in many areas of services. Moreover, often these corporations are prevented from trade in some services because of government restrictions on foreign ownership. Equally relevant to cross border trade in business is that it is difficult to categorise, to calculate, and lacking in transparency:

 
   There is no easy correspondence between the services that are being 
   traded and existing service sector statistical classifications. 
   Furthermore this trade by its very nature is hard to measure--no 
   customs officials record the passage of a physical product, and 
   keeping track of the associated international financial 
   transactions is difficult. (10) 

The built-in agenda of GATS that was concluded at the end of the Uruguay Round is intended to address these hurdles and assist multinational corporations in the pursuit of greater liberalisation of service sectors. It is believed that this is achievable through greater transparency, less 'red tape' and a greatly reduced regulatory environment. The built-in agenda, therefore, is the work program that state members agreed to commit to which is contained in the annexes and related instruments of GATS.

At the 2001 WTO Ministerial Conference in Doha, Qatar, members agreed on a timeframe for their market access commitments. The first phase of negotiations in this timeframe is known as the 'rule-making phase' in which new rules were established with regard to new service areas such as government procurement. The second phase is known as 'request and offer', which means that market access is negotiated on a service by service basis. The request and offer is a essentially a bilateral procedure where members request improved trade commitments from another member and make an offer on the basis of these requests. After the offers have been finalised and tabled, the second phase of negotiation is commenced. The request and offer phase means that member countries have to directly request their trading partners to liberalise the sectors which they listed on their national schedule of commitments.

A request and offer by the European Union (EU) created some controversy in Australia in 2002 when an EU request to Australia was leaked to the Australian media. The leaked document, which revealed the extent to which trade in services may be progressively liberalised in Australia attracted marginal attention in the Australian press. (11) In the document it revealed hat the EU had requested the listing of all public postal services in Australia (namely Australia Post) and the listing of all water services, which some feared would result in the privatisation of…