Burgmann launch Brochure Resurrecting MAI

Speech for Launch of AFTINet’s World Trade Organisation negotiations: resurrecting the MAI? Jubilee Room Parliament House Sydney 24 April 2002

Dr Meredith Burgmann, President of the NSW Legislative Council

I spoke in November 1999 at the launch of the book edited by Pat Ranald and James Goodman which analysed the successful campaign against the Multilateral Agreement on Investment (MAI). The MAI was an attempt by the OECD governments, the rich countries of the world, to remove the power of national and state governments to regulate investment. It would have led to the privatisation of public services, and would have given transnational corporations the right to challenge legislation and sue governments if their laws were inconsistent with the agreement. That campaign, conducted at national and international levels, was able to defeat the MAI because its proposals were so outrageous and affected so many areas of the community.

I was shocked to learn that that aspects of the MAI are now being resurrected in the WTO, through the General Agreement on Trade in Services (GATS) and through the proposed new WTO agreements on Investment, Competition Policy and Government Procurement. These negotiations lead up to the next WTO Ministerial meeting to be held in Mexico at the end of next year.

This publication explains what is happening and how we can campaign against it. I congratulate AFTINET and the author, Dr Pat Ranald, on this timely document and on the campaign letters and materials available on the website.

GATS is an agreement which aims to increase trade in services. The current agreement only fully includes those services which each government has listed in the Agreement. Australia and most governments have not listed essential services like health, education water, and postal services.

But in the current negotiations the pressure is on to change GATS rules to make it harder for governments to regulate and fund essential services and to open up the funding of essential public services to private investment through competitive tendering, which means privatisation.

The EU GATS document leaked last week confirms our worst fears about privatisation and deregulation through the GATS. The EU is demanding that Australia:

  • have no right to restrict foreign investment in services even in the national interest

  • remove the requirement of majority Australian ownership of shares in Telstra

  • treat postal services purely as traded goods and open them to competition by private foreign companies. This would threaten the current policy of public ownership of basic postal services to ensure that they remain affordable all Australians, especially those living in rural and regional areas

  • treat water services purely as traded goods which would threaten most state governments policies of public ownership and price regulation of water services to ensure they remain accessible and affordable to all Australians.

ALP Policy on GATS

Although there was a lively debate about trade policy at the last ALP national conference, there was agreement about an important statement of principle on trade in services.

This is that "the ALP will vigorously oppose any proposal that would require Australia to privatise its health, education and welfare sectors, reduce government rights to determine the distribution of government funding within these sectors, or which would require us to remove protection of our cultural industries".

As an ALP state Member of Parliament I am very concerned about the possible effects of both the GATS negotiations and the WTO new proposals on essential services which are run by the state government. In NSW we have public health and education systems, and our water and electricity systems are publicly owned. We have public regulation which can ensure that these essential services are of good quality and accessible to people on low incomes and those living in rural and regional areas.

We know that public ownership and regulation of these services has strong support in NSW. Decisions about them should be publicly debated through transparent and accountable processes at state government level, not negotiated behind closed doors in the WTO.

The Proposed new WTO Agreements on Investment, Competition Policy and Government Procurement

The proposed new WTO agreements on Investment, Competition Policy and Government Procurement are only at the preliminary stages but they would all resurrect aspects of the MAI . Since the failure of the MAI in the OECD, TNCS and some governments have tried repeatedly to resurrect it in the WTO.

A WTO Investment agreement would mean:

  • no limits on foreign investment in strategic industries like the media, telecommunications and airlines

  • no requirements for Australian content in film and television which protect Australian culture

  • no requirements that foreign investors train local people or use local products

  • transnational corporations could challenge laws and sue governments if government decisions harmed their investments

Under a WTO Government Procurement (Purchasing) agreement , national, state and local governments would have to give "national treatment" in awarding contracts to foreign corporations, and could not give any preference to local firms to encourage local development or employment. Governments could not even require foreign firms with government contracts to buy local products or train local people.

A WTO agreement on competition policy is being promoted on the grounds that it would use anti-monopoly provisions to curb the power of transnational corporations where one or a few dominate the market in particular industries.

But our experience of competition policy in Australia is that the anti-monopoly provisions are relatively weak and have been used rarely against private corporations. The strongest parts of the legislation are aimed at public enterprises and services, like electricity, water and public services to create "competitive neutrality" between them and private companies. This means they may put commercial goals and profitability above service quality and access for low income customers.

The commercialisation of public services also paves the way for them to be treated as traded goods under the GATS, as the GATS exclusion of public services applies only to those not provided on a commercial basis or in competition with other services.

What we can do

The good new is that there is still time to campaign against these proposals and to hold the Federal Government accountable for what it negotiates in the WTO. WE are asking in particular that they make public their requests and responses from other governments so that proposals like the EU on s can be publicly debated in the media and in parliaments.

The GATS requests from Australia to other governments are due on June 30, 2002 and the responses to the requests are due at the end of March next year. The final decisions on the proposed new agreement will not be made until the next WTO meeting at the end of next year.

I congratulate AFTINET on the publication and on the campaign and urge to you to send a letter, talk to your local federal or state politician and help to make sure that national state and local government in Australia retain the right to make decisions essential services, investment policy and government procurement policy.