pisa

I submitted the following brief comments to the Department of Foreign Affairs and Trade as part of a government request for input on Canada’s participation in a plurilateral international services agreement.

The PISA is an effort by a group of WTO members calling itself the Really Good Friends of Services to revive and take control of the GATS (General Agreement on Trade in Services) talks, which developing countries at the WTO had rightly blocked in order to try to make global trade rules work better for everyone. With a plurilateral (voluntary) deal in hand, PISA countries like Canada will be able to block a more fair or balanced international deal at the WTO by insisting that developing countries sign up to PISA’s maximum liberalization (read deregulation and market-opening in public services).

On the surface, Canada’s main interest seems to be: 1) Harper has never seen a trade or investment deal he didn’t like for ideological reasons; 2) giving Canada’s engineering, environmental (including water-related) and energy (oil, gas, etc) services firms a leg up overseas since PISA governments would lose some ability to regulate their activities, or support local firms; 3) ensuring “legal stability” for said Canadian firms, some of which might otherwise be tempted to just bribe foreign governments to win contracts.

But in reality, as we knew back in the day fighting GATS, services liberalization is about privatization and deregulation. The United States and EU will push for maximum coverage of health, water, postal and other services where they already have strong private champions looking to expand abroad. Governments that are part of the services agreement will lose critical space to regulate (for example by limiting the number of private players in those service areas or regulating how the service is provided, setting certain technical requirements or standards for those services, etc).

There’s still no telling where these PISA talks will go but our goal within the Our World is Not for Sale Network is to make sure it’s not very far. We will keep you informed of progress either way.

Submission to the Government of Canada’s Consultations on a Plurilateral International Services Agreement (PISA)
By Stuart Trew, trade campaigner, The Council of Canadians (April 30, 2013)

The Council of Canadians has strong reservations about Canada’s participation in Plurilateral International Services Agreement (PISA) negotiations for the same reason that global fair trade advocates continue to resist the expansion of the General Agreement on Trade in Services (GATS) at the World Trade Organization. Both efforts — GATS and PISA — would place far too many limits on policy space and the ability to regulate services in the public interest. These agreements are only superficially about levelling the playing field between foreign and national companies but in reality they lock in and enforce a hands-off, entirely market-based approach to service delivery that favours privatization and robs countries of effective economic development options. To the extent that the PISA moves even further than developed world GATS proposals, it will undermine the ability of countries to create new public services, remunicipalize previously privatized services, and to support local or strategically important service companies.

Public services must be excluded from trade deals

The existing GATS language related to public services does not offer enough protection because it only excludes services that are provided neither on a “commercial basis” nor “in competition with one or more service suppliers.” That definition doesn’t apply where there is some private sector delivery, as there clearly is in Canada for education, health care and insurance, and even water purification and delivery. Even if Canada were to insist on limited GATS-like language on public services in the PISA, federal, provincial and local governments would be subject to a ratchet (or standstill) clause that only locks in existing public services but requires future measures or policies to be more liberalizing, or more favourable to private sector delivery. If the PISA negotiations must move forward, Canada should insist on a complete exclusion of all public services, even where there is already some private sector involvement. That should include the right to re-regulate these sectors in the future without fear of costly trade disputes.

There is another big risk to public services and other strategically important sectors, such as finance, telecommunications, culture, engineering and energy, if future services related to these sectors are automatically covered by the PISA. This would be the case if participating countries agree to a “negative list” approach for covering services, whereby any government measures affecting covered services that are not listed are automatically covered by the restrictions on policy space already mentioned. How could Canada introduce a new pharmacare or national childcare program under these conditions without the threat of a costly trade challenge? The Government of Canada, if it must proceed with the PISA negotiations, should insist on a positive list where only those services listed are covered. There should also be an easy way for countries to remove commitments if there is a public interest in changing policy directions in the future.

PISA will harm democracy and development

The world is still recovering from the greatest global economic downturn in history, facilitated by the extreme deregulation of the financial services industry. Services sectors that are predominantly run by private interests, such as banking, accounting, shipping, insurance, retail, tourism, telecommunications, and many others, still need strong public oversight to ensure that they operate in a transparent and accountable legal framework for the public good. Other services, such as water and electricity provision, education, health care, local transit, sanitation, etc, ought to be either operated by the public or strictly regulated to ensure that the public interest is served as a priority over private profit. They should be completely shielded from international trade and investment agreements like the PISA.

Our strong preference is for the Government of Canada not to engage in the PISA negotiations. The stated benefits of services liberalization are easily outweighed by the risks to the provision, regulation and accessibility of services for the broad public interest. The only discernible benefits of the PISA are to internationally mobile services multinationals (e.g. private water firms, banks, large energy, mining and infrastructure-related services) who seek deregulation as a way to increase corporate profits. The recent financial crisis should have led to a slow down and reversal of services liberalization. Instead, the Government of Canada — in the PISA as well as ongoing Canada-EU and Trans-Pacific Partnership trade negotiations — appears to be about to about to push the accelerator pedal.

This approach is offensive to non-participating countries, and it will compromise efforts to make trade rules work for everyone. Unfortunately, because the PISA is being negotiated outside of the WTO, non-participants (as well as civil society) will have less access to negotiating documents, texts, or meetings. If Canada insists on being at the PISA table, the government should insist on making all texts public. It should also push for an open consultation on what the agreement will look like, with participation from regulatory agencies, public service providers and users, parliamentarians, and other civil society organizations focused on ensuring high-quality and accessible services for the public.