Global Trade Negotiations Threaten State Powers

Every state and local official should be paying more attention to the global trade talks at the World Trade Organization, since local power to regulate services such as health care, mass transit and a range of other public services are on the chopping block.

New proposals in a part of global trade law known as the General Agreement on Trade in Services could give global corporations the right under international law to challenge a host of state and local regulations, as Public Citizen details in this background piece:

If hotel services are bound under GATS, a state or community that halts beach-front development for environmental purposes could be challenged by a foreign hotel or construction firm even though the policy applies to domestic firms also.

[S]ome governments' requirements that elder care or childcare services be non-profit entities are forbidden. For example, in the U.S., the state of Rhode Island prohibits for-profit hospital operators. Under the GATS, a government's maintenance of any of these policies in a service sector covered by GATS would be subject to a WTO challenge.

Under GATS, government spending could not favor locally-based businesses over multi-national corporations and even regulations that indirectly benefit local firms over foreign companies could be struck down under international law. For example, a local recycling law could be struck down if it would be harder for foreign firms to comply than for domestic firms. And under proposed GATS rules, privatization of public services would become essentially a one-way decision, since governments would be barred from subsidizing public services where private firms already operate -- potentially chilling a whole range of health care and public transit initiatives.

To help local officials and advocates understand the GATS, Public Citizen has established the GATS Directory, where you can type in a service sector and see proposals under discussion. For example, if you choose government Procurement, you can further explore a list of areas, including Passenger Transport: Interurban Regular Transport, which explains:

[M]unicipally owned public transit systems may have to be opened up to competition from private foreign service providers to meet market access obligations.

[P]ublic school bus services could be seen as being in competition with private providers on a regional basis.. By committing school bus transportation, the United State s may be undermining the ability of local governments to supply this service rather than contracting it out to private, potentially foreign operators.

There's a whole lot more and the effect on local government powers could be revolutionary.And you won't be surprised to find out that Wal-Mart is trying to manipulate the global trade talks to undermine local regulation of its big box stores. Under a GATS proposal supported by the company, local and state officials would not be able to limit the size and height of buildings, locations or operating hours for retail stores.


Essentially, global trade talks have become a new venue for corporate lobbying, where state and local governments could wake up the next day to discover that home rule and state government powers have been sacrificed in the name of "free trade." Make no mistake, global trade talks are no longer about tariffs or traditional obstacles to trade; they are a new parliament of unelected federal officials beholden to global multinationals and an extreme privatization ideology.

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