International Herald Tribune / Reginald Dale
WASHINGTON Here we go again. Enemies of open markets are seeking to derail another set of trade negotiations intended to increase world prosperity, to the benefit of both rich and poor nations, at least partly on the grounds that multinational companies may also benefit.
Small groups of anti-globalization activists are targeting talks at the World Trade Organization aimed at liberalizing international trade in services, the first phase of which was successfully concluded in Geneva last week. The activists are hoping to replicate the contribution they made to the breakdown of talks on a new Multilateral Agreement on Investment, or MAI, in the Organization for Economic Cooperation and Development, which came to grief in the late 1990s.
Disinformation about MAI, spread by a number of nongovernmental organizations, was a factor in the collapse of those talks. Now some of the same pressure groups are spreading not just misinformation but patent falsehoods. Among these false claims are that the negotiations will lead to the forced deregulation or privatization of government services like health and education, that many consumer protection rules will be outlawed and that poor countries will be banned from choosing their own paths to industrial development. None of that is remotely true.
This time, however, the activists' task may prove more difficult. Unlike the talks on MAI, which involved only the richest nations, the negotiations on services include all 140 members of the WTO, most of whom are developing nations. Many of them are keen to benefit from freer trade in services, as well as from increased investment by multinational corporations. They do not appreciate the efforts of anti-globalization campaigners, mainly in North America and Britain, who seek to frustrate their hopes, supposedly in their interest.
This time, also, the WTO is not lying down. In an interview with the French newspaper Le Monde on Saturday, Mike Moore, the WTO director general, lashed out at the "lies" and "nonsense" that are being circulated about the services negotiations.
Services, which include activities ranging from banking and tourism to construction and entertainment, are the largest and fastest growing sector of the world economy. They account for more than 60 percent of global output, and in many countries an even larger share of employment, according to the WTO. But the opening of markets for services has lagged far behind progress in dismantling barriers to manufactured goods.
The current negotiations under the General Agreement on Trade in Services, or GATS, which came into force in 1995, are intended to rectify that. According to one estimate, if just one third of barriers to trade in services were lifted, nearly $400 billion would be injected into the world economy, creating vast numbers of jobs and swelling national coffers with funds to improve health, education and pensions systems. Rather than accept that anything good could come out of such a capitalistic process, some activist groups are simply making up absurd allegations against GATS.
The smear campaign has entrapped serious and respectable commentators ranging from the Lancet, the British medical journal, to Ralph Nader, the Green Party candidate in the U.S. presidential election last year, who definitely ought to know better. Among the more ludicrous charges are that governments will be barred from imposing quality controls on drinking water or issuing regulations to protect personal privacy and that GATS is a backdoor attempt to resuscitate the hated MAI, from which it is completely different.
The truth is, as the WTO is making clear in public statements, that governments will still be free to regulate services in any way they want in order to pursue national policy objectives. They will be able to specify which services they want to open to foreign competition and under what conditions.
There are generous exceptions for developing countries, and any government may invoke health, safety or national security concerns to override all other requirements. Countries can anyway modify or withdraw from their commitments.
Conspiracy theorists may not be persuaded by the WTO's counterattack. But the best evidence of the potential benefits of the services negotiations is the fact that the critics have to misrepresent the talks so badly in order to argue against them.
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