The second concern about the application of GATS to public services is how
the relevant articles will apply to publicly funded services that are not
exempt from the regulations of the agreement. There are two
levels of regulations that services may be exposed to under GATS: the first set
of regulations are referred to as 'general obligations' and apply to all services
which are not specifically exempted by a member government in the agreement, while
the second set applies only to services that a member government submits to the
standard (WTO, The General).
Member governments are under pressure
from their trading partners to submit many services to the second set of
regulations because they are more stringent and effectively open markets to
The first set of regulations come from Articles 2 and 3 of the agreement.
Article 2 Most Favoured Nation Treatment specifies that a government must treat
all other WTO member governments equally when opening a particular service
market to trade (WTO, The General).
So if Canada has negotiated to allow American companies to provide telecommunication
service within Canada, then Canada must allow companies from every other WTO
country to provide that service in Canada if they chose too.
Article 3 Transparency
requires all members to "publish all measures of general application and
establish national inquiry points" for other WTO members
(WTO, The General). This article
sets a level playing field for all competitors in the marketplace. No one
competitor can benefit from special knowledge about a particular set of
regulations or rules about the telecommunications sector in Canada. The government
must provide the same information to all competitors from WTO countries.
These measures if imposed to government-supplied services
appear to have no affect on those services.
It is the second set of GATS regulations that cause concern for many publicly
funded service sectors. Services can be scheduled or selected by
individual governments to fall
under these rules. According to Woodroffe and Joy, this optional structure of
the second set of regulations is
unusual and this alone is indicative of the concern among negotiators about the scope of
the agreement (5). Of these provisions,
three may play a significant role
in publicly funded services such as libraries: Article 17 National Treatment,
Article 16 Market Access, and Article 8 Monopolies.
Steven Shrybman, a lawyer specializing in international trade,
was commissioned by the Canadian Library Association to write a report about
the possible ramifications of the
GATS for publicly funded libraries in Canada. Although his focus was on libraries,
the same concerns can be raised for other publicly funded services in
Canada and elsewhere. The National Treatment
provision requires governments to "not operate discriminatory measures
benefiting domestic services or service suppliers"
(WTO, The General). Shrybman points out
that this article
is particularly troubling because it does not distinguish between public
non-profit services and private for-profit providers and that it applies to
subsidies received from governments to public services
Shrybman also voices concern about Article 16 Market Access because although
this clause deals with the opening of all modes of service delivery for
scheduled sectors, it may limit the ability of governments to require only
certain types of providers to provide the service and could also limit the
a government's ability to discriminate in favour of publicly-funded service
providers (12). Finally, Article 8
Monopolies asserts that all state monopolies
must comply with GATS and not abuse their monopoly postion. Shrybman
believes that this clause may play a major role in the future of
public service providers as it has already been used in a recent claim against Canada
Post by the United Parcel Service of America (12).
Woodroffe and Joy, who agree
with Shrybman's concern regarding these clauses, point out that governments can
limit GATS commitments made in any service sector
The WTO counters the concerns expressed by Shyrbman as it states, in its own
documentation, that the
articles are not binding to every service sector and that it is legitimate for
any country to
- maintain a monopoly
- to open the service to competition but to only allow national companies to
- to open the service to both national and foreign competitors without making
- or to make GATS commitments that give foreign companies the right to compete
with national firms in any sector depending on the level of commitments agreed
to by the government in its negotiations
(WTO, GATS 13).