To respond to the public debate about the implications of these clauses for
publicly funded services, the WTO states that there has been no question about
the meaning of the phrase 'in the exercise of governmental authority' from any
member government and therefore no further definition of the phrase is necessary
(WTO, GATS 12). In a public document,
the WTO acknowledges that some
nongovernmental organizations concerned with public services have raised the
concern that "GATS might result in the abolition of public funding for national
institutions, on the ground that it undermines free trade" but assures the
public that "[s]uch concerns are unfounded. There has never been any proposal,
or even debate, in the WTO services context concerning the abolition of public
funding: WTO Members would certainly never agree to that"
(WTO, GATS 11).
However, it should be noted that the WTO does suffer from a credibility issue
regarding its statements about what issues are likely to be negotiated between
its members. The WTO also stated in its publication GATS: Fact and Fiction,
which was produced in 2001, that no
countries had made any GATS commitments
regarding water and stated that would actually inconceivable that any government
would do so (WTO, GATS 13). In a press
release about Indonesia's trade policy
in 1998, which was posted on the their own web site, the WTO noted that
"Indonesia is gradually abandoning its traditional
reliance on [g]overnment control and public monopolies in services.
Infrastructural services (telecommunications, water supply,
been largely opened to FDI [foreign direct investment], financial services have
been deregulated, and significant commitments were made in the GATS.
[emphasis added]" (WTO, Trade). In another
WTO document, which was leaked to the public in 2000, the European Community requested
that Canada to open its services involving
"Water collection, purification and distribution services through mains except
steam and hot water" to foreign competition in the during the current rounds of
(GATS 2000 19). This example based on the
sensitive issue of water does lead one to question the veracity of such blanket
statements as the previously noted statement about public funding.
Finally, the WTO asserts that "the issue [of government services] could only
arise if a specific
measure which had been challenged in dispute settlement were to be defended on
the ground that it applied only to services supplied in the exercise of
governmental authority and was therefore outside the scope of GATS"
In response to this statement, Shrybman replies "to simply leave the result to
the vagaries of international dispute resolution is hardly a satisfactory
response given the significance of the consequences of miscalculating the scope
of GATS application" (25).