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GATS: Public Services under Pressure to Liberalize:

Global Issue – Paper 1 GATS: Public Services under Pressure to Liberalize Published on occasion of the WTO-Conference in Cancún 2003- The GATS-negotiations in the WTO – A challenge for international civil society by Thomas Fritz & Peter Fuchs

Urgent-Biden and Trump's Medicare and Social-Security traps for the unwary -proof below

URGENT: Both US Presidential candidates have plans to make changes to our current Medicare and Social Security systems that WILL DESTROY THEM . A little known trade agreement literally dooms them unless we leave it immediately. GATS COMMITMENTS PUT ALL PUBLIC SERVICES ON A FAST TRACK TO PRIVATIZATION THAT RATCHETS IN. GATS MUST BE LEFT NOW. As things are now, expanding either of these programs in any way is virtually guaranteed to destroy them. Proof is below.

services of general economic interest

Services which do not qualify for any governmental authority exclusion, i.e. commercial services with a shrinking public component (the public component must shrink, and transition to market based entirely.) Note, this only applies in services with government involvement at the federal, state or local level or when the government has control or where tax money is used see definition of "all measures of general application".

Fake "Public Option" scheme trotted out every four years to hide the GATS lock-in for another four years.

What they call in Europe "services of general economic interest". Why can't it work here? Because the EU services were pre-existing to GATS, so are grandfathered in. If they made any changes, like Brexit, they would break too. Just ike the UK's have been gradually being privatized. And like us, they are not allowed to create any new ones unless they modify their GATS commitments, and if they had committed healthcare they likely have to pay a high price for doing so.

Mind the GATS! (Robert Newman, The Guardian, 2000)

"Leaked WTO documents show them currently working out a list of what will be acceptable as a "legitimate" government objective for any regulation of services under GATS. That of "safeguarding the public interest" has already been rejected. If GATS goes ahead, warns economist Susan George, "then Europe can kiss goodbye its public health services". But even though that's just the start of the disaster, there has been no parliamentary debate or news coverage about GATS. (It's way too important for that.) The British government's official line is that there's nothing to worry about anyway. The DTI claims GATS won't apply to the NHS or education here because "non-commercial services" are exempt from the fiat . But GATS says that if you've got just one tiny part of a public service that's even an iddy-biddy-bit commercial then THE WHOLE THING IS UP FOR GRABS."

GATS and Government Services

"There are two major issues raised in the literature about GATS and its application to publicly funded service providers such as libraries. The first issue is the exemption of some services from all parts of the GATS agreement and the second issue pertains to the GATS articles that apply to services that are not exempt. To begin with, not all services are or will be negotiated for inclusion to the GATS. An exception was made for services which fall into the general exemption of "government authority". These services are not required to be liberalized to trade in any way nor is any part of the air transport and traffic sectors (WTO, GATS 2). The exception of "services provided to the public in the exercise of governmental authority" is contentious because its meaning has not been clearly defined in GATS. In Article I(3) of the agreement there are two tests applied to the definition of a government provided service: first, it must not be offered on a commercial basis and second, it must not be provided in competition with other service providers (Shrybman, iv). If a service offered by the government fails these tests, then the government must withdraw from providing the service or fund all other providers equally. The WTO states that this position is straightforward and covers "social security schemes and any other public service, such as health or education, that is provided at non-market conditions" (WTO, The General). However, as Hunt points out, these two tests actually make it difficult to determine what would qualify as a government service under GATS when those clauses are closely considered (32). Services such as health care and education have private for-profit suppliers, which 'in competition' with publicly funded and supplied services. Despite the assurances of the WTO, it would seem that these clauses would effectively exclude those services from the list of services offered in exercise of government authority."

The Effects of International Trade Agreements on Canadian Health Measures: Options for Canada with a View to the Upcoming Trade Negotiations (2002)

Richard Ouellet, Laval University (October 2002) -- "It will be noted that while Canada has avoided the potential effects that the international economic agreements could have on health care, it has done so by taking advantage of the structure of agreements based on quite different approaches. • If the Canadian government wishes to continue exempting our public health systems from the effects of these agreements, it will have to acknowledge that doing so by simultaneously using approaches as different as those of the GATS and the NAFTA is not without risks. What is needed is an integrated approach that reflects trade concerns while respecting the health care priorities of governments."

More worries about GATS (The Guardian letters 2002)

"Under GATS, the more a service is exercised in competition or on a commercial basis the more it appears that a service can be opened to liberalisation. In health, the involvement of the private sector in the NHS may mean that the NHS would fall under Gats rules. The re-emergence of a market in the NHS, the new "localism" of primary care trusts and foundation hospitals which will have their own financial freedoms, the proposed privately run diagnostic and treatment centres, the use of overseas clinical teams, agreements with the independent sector for integrated care and the contracting out of support services call into question the assumption that the NHS is exempt from Gats. Services liberalisation under the Gats could mean the last rites for the NHS and other public services. The government needs to clarify the terms of Gats to ensure public services remain out of reach. What we don't want is to leave the NHS awaiting a trade challenge. We plan to call on the government via the DTI's consultation on Gats to press for greater clarity in its wording, to ensure that public services are exempt and to undertake an impact assessment of the GATS before it commits itself to an irreversible process. Warren Glover Chartered Society of Physiotherapy GLOVERW@csp.org.uk (2002)"

WTO Secretariat. Health and social services: background note by the Secretariat S/C/W/50, 18 September, 1998 (98-3558)

“The hospital sector in many counties . . . is made up of government-owned and privately-owned entities which BOTH operate on a commercial basis, charging the patient or his insurance for the treatment provided. Supplementary subsidies may be granted for social, regional, and similar policy purposes. It seems unrealistic in such cases to argue for continued application of Article I:3, and/or maintain that no competitive relationship exists between the two groups of suppliers of services.” In other words healthcare "public options" like the UK's NHS must be subject to WTO globalization rules such as GATS' rules on services liberalization and competition.

Crowd-Out Ten Years Later: Have Recent Public Insurance Expansions Crowded Out Private Health Insurance?

This concept is important in countries like the US (and UK as part of the EU) who have made GATS and similar commitments, because whatever it does, any public option is not supposed to cut into a co-existing insurance industry's core customers, if it does, the country's laws are subject to challenge by any interested party. (typically a country, like the US) under GATS rules, which are very broad and designed to create and support new rights of corporations, as protected by countries. If a country feels its insurance industry could do better if the other country was forced to "discipline" its domestic regulations to comply with WTO rules. In the case of health care and health insurance, this key gotcha would not apply in a country where there was a single payer system like Canada's - Don't confuse a system like England's (whose NHS, despite its dominant position, is only a 'public option' therefore quite vulnerable to external challenges) with Canada's (totally single payer+exempt) . See discussions elsewhere on here of "GATS Article I:3" and the "Governmental Authority Exclusion" - use the keyword/tag interface - currently in the left hand column, you may need to scroll down, to find them.

“Right now, the deck is stacked against patients,” “Healthcare reform is not going to change the ball game.”

By Lisa Girion, Los Angeles Times - (October 2010) "Yet a patient’s ability to fight insurers’ coverage decisions could be more important than ever because Congress, in promoting cost containment and price competition, may actually add to the pressure on insurers to deny requests for treatment. "By requiring insurers to cover everyone, regardless of pre-existing conditions, healthcare reform will make it more difficult for insurers to control their costs, or “bend the cost curve,” by avoiding sick people. That leaves insurers with the other big cost-containment tool: turning down requests to cover treatments. “There are going to be a lot of denials,” said insurance industry analyst Robert Laszewski, a former health insurance executive. “I am not setting insurance companies up to be villains. But we are telling them to bend the cost curve. How else are they going to bend the cost curve?” Experts said the legislation under consideration does not significantly enhance patient protections against insurers refusing to cover requests for treatment. Most people currently have no right to challenge health insurers’ treatment decisions by suing them for damages."

The UK's health is threatened by the push to privatize it's National Health Service. Here is what must be done to preserve it.

The reason why the UK's NHS is vulnerable is the fact that they signed onto the WTO GATS agreement, and also SELL commercial health insurance in the UK, which opens up a Pandora's box of problems. These commitments will end when the UK leaves the EU. That change will trigger demands for compensation for any perceived loss in "future expected earnings". Additionally, re-joining the WTO may trigger similar demands from other WTO Members. This should be obvious to anybody who is familiar with the GATS and WTO negotiations. So its quite strange that there has been nothing about it in the media.

How the World Trade Organisation is shaping domestic policies in health care

(The Lancet) "The previous round of WTO ministerial talks (the Uruguayan round) allowed governments to protect health and social services from GATS treatment by defining them as government services. According to GATS Article 1.3, a government service is one “which is supplied neither on a commercial basis, nor in competition with one or more service suppliers”. Article 19 of GATS is, however, intended to end this protection. “Members shall enter into successive rounds of negotiations . . . with a view to achieving a progressively higher level of liberalisation.” The WTO secretariat has argued that for services to be classified under Article 1.3 they should be provided free. Many governments initially protected health services from GATS treatment by defining them in this way. But the WTO has highlighted the inconsistencies in this approach. 12 “The hospital sector in many counties . . . is made up of government-owned and privately-owned entities which both operate on a commercial basis, charging the patient or his insurance for the treatment provided. Supplementary subsidies may be granted for social, regional, and similar policy purposes. It seems unrealistic in such cases to argue for continued application of Article I:3, and/or maintain that no competitive relationship exists between the two groups of suppliers of services.” In addition, Article 13 of GATS calls for the end of subsidies that distort trade and requires members to negotiate procedures to combat them. Therefore, according to the WTO, wherever there is a mixture of public and private funding, such as user charge or private insurance, or there are subsidies for non-public infrastructure, such as public-private partnerships or competitive contracting for services, the service sector should be open to foreign corporations. Health-care systems across Europe are vulnerable on all these counts."

GATS and Public Service Systems

This is a must-read article as its by far the most concise and understandable explanation of the "governmental authority exception" an all important "two-pronged test" or definition, that defines the scope of what is allowed to be a public service and what is not, in the GATS agreement. In other words, what is subject to privatization rules, and what isn't. This definition is also borrowed or imported, in the computer programming sense, "as is" into hundreds of other trade agreements all around the globe. So this essay is extremely useful in understanding which healthcare or higher education proposals could work (and which ones would be subjected to a death of a thousand cuts, and couldn't) for example. The essay was originally written and published by the government of British Columbia province in Canada.

Public Citizen: "Presidential Candidates' Key Proposals on Healthcare and Climate Will Require WTO Modifications"(2008)

This essay's by Public citizen explains how the 2008 Presidential candidates proposals (just as today) all violated provisions of the GATS agreement and US 'commitments' and other trade rules and how those commitments were likely to conflict with the promises, making them impossible or very difficult to implement the longer we waited. The references are extremely useful. Highly recommended you read this if you are interested in healthcare in the US.