FACTS againest MYTHS OCTOBER-NOVEMBER-2003.pdf
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VIKAS ADHYAYAN KENDRA
October - November 2003
INFORMATION BULLETIN
In the Service of Corporates & MNCs*:
The Myths Behind GATS
COMMENT
ince the 90s there has been a sea change in the economic life of the industrialized
countries of the North. The 19th century notion of free trade in goods has been taken
over by free trade in services in the 20lh century with ‘industrialisation’ changing to
‘servicisation’. Public services have rapidly become key components in the transnational
production chains shaping today’s global economy affecting almost all aspects of the
natural world — energy extraction and production, transport, travel and tourism,
construction, distribution, waste disposal and sewage, water and the environment.
International trade negotiations are used as tools to formalise and institutionalise this
process, providing wide-ranging legal rights to MNCs investing in such services.
S
On the agenda of the GATT Uruguay Round of trade negotiations the trade in-services
had been billed “Top Priority”. The idea of trade in services had however been first
introduced in 1982 by the US, in the negotiations of opening the markets of the South for
foreign trade. The US intentions had become clear even in 1981 by the then US Trade
Representative Bill Brock The following year at the GATT Ministerial Meeting the US
pushed this issue still further by proposing a North-South Round. This process ended in
April 1994 at Marrakesh at the conclusion of the Uruguay Round leading to the creation
of WTO with the signing of the Agreement under Art.IV that included GATS that came
into effect in 1995. GATS is the first multilateral, legally binding agreement that covers
trade and investment in services. Its mandate is the 'liberalisation of trade in services'.
That is, the dismantling of government barriers to the privatisation of public services.
The aim is to make it impossible for governments to operate public services on a notfor-profit basis, without the participation of corporates. GATS will allow the WTO to restrict
government actions relating to public services through a set of legally binding constraints.
Any government breaking the rules of the WTO will face the threat of sanctions.
Itj2
On a closer look the emergence of such a regime is not surprising. After all, according to
the European Commission, “The GATS is not just something that exists between
Governments. It is first and foremost an instrument for the benefit of business”. The
WTO itself defines GATS as: "Under GATS, if a country allows foreign competition in a
sector, equal opportunities in that should be given to service providers from all other
WTO members. This applies even if the country has made no specific commitment to
provide foreign companies access to its markets under the WTO”.
Q FACTS agajnst MYTHS - October - November 2003
FOR PRIVATE CIRCULATION ONLY
“Services” are basically activities that like any other
good or product can also be bought and sold.
Unlike other goods, however, services cannot be
picked up and carried away. For instance, banking
and insurance, travel and tourism phone bills,
among other services. “Services” are associated
with everything the public need and everything
they elect governments to do. A service is produce
of human activity aimed to satisfy a human need
and which does not therefore constitute a tangible
commodity. There are many types of services,
ranging from heart surgery to road construction,
electricity transmission to education, and childcare
to water purification and conservation. Countless
people deliver services vital to the daily lives of
people and in turn, many jobs are directly tied to
the provision of services to others. Although a
recent development the trade in services is the
fastest growing sector in international trade,
experiencing an unprecedented boom and offers
rich pickings for wily multinationals. About onefifth of the global trade is trade in services - a
global market worth $1,350 b. - a market
predominantly controlled by industrialised
countries of the North. In the 90s its annual growth
rate was 6 per cent and that of the South a mere
0.42 per cent but which comprises an increasingly
important sector, constituting a high proportion
of GDP (around 50% in 2001 and higher in some
of them: 66% in Singapore and Uruguay) and
contributes to growth, employment and provision
of basic needs.
The relevant point here is that there is great deal
of ambiguity on what constitutes “pro
development” regulation of the' service sector.
After all, GATS — itself a highly complex and
confusing process — affects various types of
development policies (in the South) e.g. national
treatment, market access, bank payment and
transfers, environment and the rules on domestic
regulation. Ratchet-like tightening of constraints
on government regulatory authority is built into
the very structure of the agreement, as members
have committed to expanding GATS through
“successive rounds of negotiations...aimed at
achieving a progressively higher level of
liberalisation”.
GATS is an indirect approach of introducing an
agreement on investment since one of the modes
of trade in services (See Box on pg.3) imply not
only opening up commercial services (such as
banking and insurance) to foreign investment but,
more significantly, vital social services. Thus, the
GATS Agenda is very similar to other efforts, such
as the failed Multilateral Agreement on Investment
(MAI) to give greater rights to MNCs at the expense
of democratic structures.
On the other hand
the pro-active state
intervention to affirm its obligations to the people
is being replaced by a market paradigm as the
only provider and the “new solution" to the
problems of underdevelopment of the South.
Accordingly, the so-called Quadrilateral
governments - the US, Japan, EU and Canada
— pressurize the South for guaranteed
irreversible access to the markets of the South.
Further, the GATS process involves resorting to
the so-called “Request and Offer” method in which
all countries make their initial “requests” to any
other WTO member country. Such requests details
the sectors and sub-sectors that the requesting
country wants the other member State to open
up, and the restriction that need to be removed.
For instance, one among such “requests” was
made to the Government of India by the EC
During the GATS negotiations in July 2002. The*
EC demanded virtually unlimited and
unconditional access to services sectors like urban
water supply, sewage and waste water service;
energy distribution services including oil, gas and
electricity; retail sale of fuel oil, bottled gas and
wood; postal services; wholesale and retailing;
construction of roads, highways, bridges, dams,
buildings, etc., tourism; rail and road freight
services; financial service many others. Their
demand also stressed further privatisation and
commercialisation of public services such as
education and health care, and further de
regulation of publicly regulated sectors such as
media, publishing, telecommunications, energy,
transport, financial, postal and even services like
water utilities. These negotiations are to be closed
by January 2005.
Public Services have been classified into 3 major’
principles and into 4 types depending on their
mode of provisions (see box on pg.3).
Prior to the GATS negotiations the powerful US
lobby group, the Coalition of Service Industries
along with the European Services Forum and the
US Trade Representative and European
Commission identified the following priority areas
for trade liberalisation: health care; hospital care;
home care; dental care; child care; elder care;
education; museums; libraries; law; social
assistance; architecture; energy; water services;
environmental protection services; real estate;
insurance; tourism; postal services; environmental
protection services; transportation; publishing;
broadcasting and many others.
(7 FACTS against MYTHS - October - November 2003
2
GATS: Principles & Modes
The three major principles are i) the most-favored nation treatment ii) market access (Art.XVI)
and iii) national treatment (Art.XVIl). The first refers to a country that must treat the service
supplier of another member-country no less favorably than it does the service supplier of any
other member-country. Market access obligations imply that a country is bound to allow Foreign
Service supplier to enter its market for providing services. The last refers to treating foreign
supplier under the same terms and conditions laid out for domestic suppliers.
Apart from these principles there are also 4 modes through which trade in services operate that
differs substantially from trade in goods. These Modes are:
Mode 1: Cross Border Services that are delivered to consumers in another country by a person
in the provider country (e.g. call centres);
Mode 2: Consumption Abroad. The service consumer comes to provider country to avail of
service (e.g. a tourist; or an international ship getting repaired in workshop in provider country);
Mode 3: Commercial Presence. The service provider opens up a company in the consuming
country, (e.g., legal firm of UK opens office in India and starts legal consultantcy)
Mode 4: Movement of natural persons. Temporary movement of persons from provider country
who go to a consumer country for delivering services (e.g. computer software engineers from
India visiting the US on assignment)
These developments are highly ominous and
chilling with serious implications for the South.
However, central to the whole issue is the serious
threat that GATS poses to India. GATS mandates
unrestricted space to corporates and TNCs in the
national economy forcing the government to
accord national treatment to their services in all
respects whether in the form of law, regulation, or
administrative action including the production,
distribution, marketing, sale and delivery of
services. In essence, what all this amounts to is
that (whilst implementing the three principles)
>
There will be no control over foreign equity
participation,
>
There will be unlimited access to TNCs to
invest in any area of the national economy
>
Foreign trading monopolies , etc will be
allowed to be established in the country
and
>
Even unlimited entry of foreign experts
invited into the country by TNCs
l
This has naturally led to concerns worldwide
among networks, NGOs among others viz.,the
Common Front on the WTO, the Commonwealth
Public Service Union, Friends of the Earth
International, Alliance for Democracy, Save the
Children, Third World Network,, International
Restructuring Educational Network, the Global
Policy Forum, the Public Services International,
among others. When viewed in the context of the
new phase of economic globalisation and in the
second generation of economic reforms
underway — the State withdrawing from public
utility services, that is, abdicating its responsibility
of providing such services to the people is no
longer seen as such but as a function of the market
— the implications of GATS is all the more
ominous. That is, natural resources become
tradable goods and access to them is priced and
controlled by profiteers affordable to those with
the purchasing power but beyond the means of
the vast majority of the poor in rural and urban
areas. In all this, international agencies,
governments and even TNCs design and
implement policies to reduce the role of the State
in all aspects of life on the one hand and yet on
the other demand free access to natural resources
of the host country for commercial exploitation by
corporates.
In line with its neo-liberal perspective of the global
economy and privatisation as its key mantra the
World Bank aptly chose the theme, “Making
Services Work for Poor People” for its Annual
Report 2OO4.This report further reinforces the way
services, under “public responsibility”, will be made
to open up to private sector participation and
eventual ownership under the facade of economic
liberalisation and investment. To understand how
all this can happen and how even the Indian
government could allow this removal of the most
FACTS against MYTHS - October - November 2003
basic of human rights without even - or informing
- its citizens makes it necessary to go to the roots
of the global trading system, examine what the
GATS issue is all about, and unravel such false
claims that GATS is a “development friendly” trade
agreement that favours the poor of the South.
MYTH: Being pro-development the GATS
Agreement benefits the South.
FACT: This myth is prevalent among many
Governments of the South as well as several
global NGOs. GATS, however, poses particular
problems for poor counties around the world!
The fact that liberalisation need not be done at
one stroke but gradually over several rounds of
negotiations - in effect allowing domestic reforms
and external openings to be in step - does not
make it any more “development friendly”.
Firstly, it is due to the very nature of services and
the inclusion within it of social concerns like health,
education and sanitation where governments
have a responsibility to ensure universal access,
while other services include utilities essential to
the development of the economy, such as
telecommunications. Secondly, through the
provision for “commercial presence” (foreign
investment) as well as cross-border trade, as
modes of supply of services, GATS influences
government policy for MNCs and TNCs located
in the domestic economy. Thirdly, core WTO
principles require governments to treat their
domestic counter-parts (even though limitations
can be put in countries’ schedules of
commitments), and treat all foreign suppliers
equally. Yet, the GATS rules extend beyond this,
restricting government’s ability to make rules even
if they apply tao both domestic and foreign firms.
For instance, the adverse implications for the
South in implementing the three GATS principles.
(see above)
Universal (now Veolia Water operating from
Bangalore, Jamshedpur, Agra, Kolkata, Chennai,
Delhi and Visakapatnbam), Monsanto, Suez,
Bectel, Coca Cola and Pepsi are already
operating in India.Some 30 cities in Maharastara,
Karnataka, A.P. and Rajhasthan are bidding their
respective municipal water supply to a few mega
MNCs.
Privatised and commercialized supply of water are
already depriving the poorer and marginalised
part of society of their basic right to water and
pushed further towards deprivation. Water thus
ceases to be a social asset as the process of
corporatisation is inevitably accompanied by
commercialisation/commodification.
The resulting increased pressure on water sources
will also lead to environmental damage.
Furthermore, the range of sectors and sub
sectors requested to be opened by EC has serious
implications as well. For instance, opening up of^J)
the retailing trade. This has already opened the
way for huge shopping chains have entered the
country, which is wiping out livelihoods of lakhs of
small shopkeepers and vendors. In this city of
Mumbai itself state of the art shopping malls
continue to mushroom.This is what has happened
in Thailand after it liberalized its retail sector.
However, .the most serious implications are in
sectors like water. A further illustration of what
such a agreement implies relates to the Power
sector. Since signing GATS in this sector, India
has signed over 20 MOUs with foreign firms. But
most of these pacts are flawed and favouring these
firms. Some of these negative features are
Similarly Art.VI on any type of environmental law
or regulation can clearly obstruct - if not entirely
halt - reasonable efforts to protect the
environment. The EU proposal to include water
as subject to GATS discipline would expand the
access of the water MNCs like Vivendi, etc., to
this vital resource. Market access limits the right
of governments to restrict the amount of water
taken from lakes, rivers and groundwater sources.
Access to potable water is a basic human right
and regulating access to water is often entrusted
to local authorities that supply water through public
or communities. A number of large predominantly
European water companies, such as Vivendi
>
projects are awarded without the proper
bidding process;
>
16 per cent rate of returns in dollars is^
guaranteed on the highly inflated capital
investment;
>
Borrowings are allowed at very high rates
of interests as in the case of the MNC,
ENRON, to whom the rates that were
offered were even higher than the existing
borrowing rates! In 1994 tahe Central
Government allowed ENRON to borrow at
13% without caring to note that such a rate
would be tahe bench mark for lending to
any Indian firm in the future. Also in the
Enron case the state electricity boards
were compelled to purchase all power
produced, irrespective of demand.
Equally disturbing but less known is the link
between services and the ENRON scam — that
FACTS against MYTHS - October - November 2003
4
is the role-played by the audit and accounts firm,
Arthur Andersen. Prior to the revelations of this
scam a major attempt had been launched to
harmonise the accounting rules. Until its collapse,
ENRON was a major player (directly through the
US Government and indirectly via the Coalition of
Service Industries (See Above) and its lobbying
with WTO officials and delegations). Five
accounting firms have a virtual monopoly on the
audit of roster of the US companies listed on the
stock markets, and had enough political clout to
prohibit conflicts of interests. These firms often
audit the accounts of companies while also acting
as paid financial consultants.
Clearly, the claim that GATS is “pro-Development”
is sheer nonsense. At the most it may be as friendly
to development as the 17lh-18lh century British
Navitation Acts were to American colonies which
sparked off the Boston Tea Party and the
„ American Revolution!
World Trade System: The Origins
MYTH: Multilateral trade agreements are the
result of the exponential rise, in recent times,
in foreign investments.
FACT: Global trade agreements are not a recent
phenomenon. Its roots were first laid after the
Second World War, to forge a multilateral
agreement on foreign investments.
In 1947, a draft Charter to establish a global
trading system was first presented at a conference
in Havana, Cuba, called the International Trade
Organisation (ITO). Along with the IMF and WB,
the ITO represented the third institution for
promoting post-war economic cooperation. The
ITO was to be created with a very different
mandate to today’s WTO. It was to promote orderly
(J) global trade under the jurisdiction of the UN. The
pursuit of trade was to explicitly take into account
important social considerations, including full
employment and the human and social rights
guaranteed by the UN’s Universal Declaration of
Human Rights. The draft document known as the
Havana Charter not only addressed trade issues
but had provisions to deal with FDls.The ITO even
had the right to regulate TNC capital to ensure it
served these social ends. The Havana Charter
however was not ratified and so the ITO was
stillborn unable to play a decisive role in the
investment policies of governments worldwide.
Earlier proposals on the Charter by the US had
extensive right for investors including the obligation
of host countries to extend national and the mostfavored-nation. But these measures were strongly
opposed by other countries. For instance the then
Czechoslovak government was not in favour of
giving German investors the same status as
investors of other countries. As a result, the US
had to dilute several rights granted to foreign
investors in its earlier proposals. The Charter also
had to face the wrath of the US MNCs who were
incensed on the provision in Chapter V regulating
anti-competitive policies of the private corporate
enterprises. In comparison to the present situation,
the scope of investment policies under the Havana
Charter was rather limited. For instance, the
Charter did not incorporate any rules related to
performance requirement and dispute settlement
mechanism between government and foreign
investors.
Despite the fact that the US Government was one
of the main forces behind the Havana Charter,
the US Congress refused to ratify it. Consequently,
the proposal for establishing ITO was given up
and the General Agreement on Tariffs and Trade
(GATT) was launched as a temporary measure.
For nearly 4 decades since its inception, GATT
never brought investment issues under its rubric
and prudently maintained the dividing line between
trade and investment issues. It was only at the
Uruguay Round of the GATT negotiations (198694) that the investment issue was brought within
its framework.
The failure to establish the ITO was one of the
major reasons which facilitated a shift from
multilateral to bilateral investment agreements. In
the 1950s and 60s, bilateral investment
agreements were the dominant instruments of
investment agreement.
MYTH: GATS has space for flexibility in-built
in its framework and does not impinge on the
vital interests of the South.
FACT: The so-called flexibility space that GATS is
both ambiguous and uncertain. This makes it
difficult for countries to be flexible and undermines
effective government policy-making. For example,
there is uncertainty over what measures are
covered by the “de facto discrimination” rules of
Art.XVIl; uncertainty over exactly what constitutes
“government procurement”; uncertainly over
whether the rules on “domestic regulation” will
apply across the board or only to specific
commitments and therefore whether and how
government can list limitations to these rules;
uncertainty as to what kind of regulations would
violated a “necessity text” requiring measures to
be “no more burdensome than necessary”; and
uncertainty over how GATS applies to subsidies.
FACTS against MYTHS — October - November 2003
5
There is also confusion over the exact coverage
of the standard market access and national
treatment rules. For example, if GATS rules so
clearly exempt all public interest regulations - as
claimed by the EU - why did 4 EU countries feel
that need to specifically list a limitation to their
commitments in the hotels and restaurants sub
sector allowing them to ‘‘protect areas of specific
historic and artistic interest’?
If similar rules on domestic regulation, market
access, de facto discrimination and subsidies are
transposed into a new investment agreement and there is every reason to believe they will be —
the uncertainty will simply be transferred to more
parts of the economy. The flexibility of countries
to regulate in the manufacturing, mining,
agriculture and fisheries sectors will be
undermined by not knowing what is WTO legal.
And effective development policy will be left
hanging on the interpretation of future WTO panels
Another problem with this claim is that policies
become locked-in. The GATS does have a
procedure (Art.XXI) for governments to withdraw
commitments but this can only be initiated 23
years after the commitment is made and requires
compensation, normally in the form of some other
kind of liberalisation, which then requires the
consent of other WTO members that may be
affected. This makes it very difficult, and perhaps
impossible for governments to withdraw
commitments. Thus, once a country makes GATS
commitment, there is effectively no turning back.
This has serious implications for democracy and
the right of future governments to change the
direction of economic and social policy.
On this issue of lock-in, it is worth bearing in mind
a case from Thailand. In a submission to the WTO
in 2002, Thailand described how it liberalised its
retail sector, attracting investment from European
retail chains. This has had both benefits and
drawbacks. Over time, the Thai govenment
realised that it needs to intervene in the market to
address the adverse impacts on its domestic
retailers. Critically, it has not made any GATS
commitments in retail so it is relatively free to
develop whatever mechanisms are appropriate.
The lessons from this case are twofold. First, it is
clearly possible to attract investment without
making GATS commitments. Second, all
governments make mistakes and it is much easier
to go through an iterative regulatory process if
GATS commitments have not been make.
Unfortunately, the EU has targeted the Thai retail
sector and the Thai government seemed to have
had second thoughts about implementing strong
regulations.
The past history of industrilised country service
provision also demonstrates the need to avoid
locking-in policies. Some industrialised countries
started off providing services through disparate
private companies, but then changed the form of
service provision through a series of regulatory
developments. For instance, the UK railways
>
in the 19"1 century had over 120 private
railways ;
>
in 1921 a Government act allowed these
to be merged into 4 big companies;
>
in 1947, the railways were nationalised;
■>
in 1993-1996, the railways were privatised
(including infrastructure)
>
in 2002, the ownership of the tracks and
responsibility for maintenance were put in
the hands of a ‘not for profit’ company;
Making full GATS commitment is a prescription
for just one dominant model - private, profit-driven
service provision. Real flexibility allows
governments to learn from experience and allows
future governments to change policies. The GATS
denies this, and there is every reason to think that
a similarly strict withdrawal process will be included
in any new investment agreement. This will, over
time, ensure that the South is unable to re
regulate investment in response to changing
circumstances, changing governments or
evidence that a particular policy is failing.
The third but important problem is that the flexibility
governments can exercise in the GATS, and their
ability to choose exactly when and how to
liberalise, is dependent on a fair process
conducted amongst equals. This is not the present
case in the WTO - the South are put under intense
pressure by economically and politically dominant
WTO members such as the US and EU.
In theory, the WTO is a place where the South
can group together to increase their bargaining
power but the bilateral “request-offer” process in
GATS makes such strength in numbers difficult, if
not impossible.
This problem is exacerbated by the lack of
capacity in poor countries to adequately deal with
the scope of GATS. It has been reported that
single developing country negotiators — often
responsible for covering a wide range of different,
and very complex, WTO agreements - are going
into bilateral GATS negotiations against 12 or so
FACTS against MYTHS — October - November 2003
6
industrialized country experts, each specializing
in just one part of one WTO agreement.
And India’s service industry, having failedsto
compete with mega TNCs is totally shattered.
It is therefore asking people to be very politically
na’ive if they are expected to believe that bilateral
GATS negotiations are simply a friendly one-toone chat between a rich and poor country official
discussing the relative human development merits
of different possible GATS commitments. Pressure
is part and parcel of the process and a country's
GATS “flexibility" is therefore, to some extent,
relative to its political and economic clout.
To conclude, the Preamble and Art.IV are a sop
to the South. They identify the steps to be taken
but they do not contain any commitment to adopt
these measures. Similarly, Art.IX pertaining to
restrictive business practices of MNCs is an
eyewash. It merely recognizes that certain
business practices of service suppliers may restrict
trade in services. But it has no specific commitment
to eliminate these practices except that “Each
member shall, at the request of any other member,
enter into consultations with a view to eliminating
(restricting) practices...”.
Clearly, given the unequal power equations
between countries of the North and the South,
the latter has been compelled to undertake
treatment commitments over time by narrowing
down the flexibility available to them. For instance,
as pointed out above, the EL) “Request List” seeks
removal of a wide range of regulatory measures
in several sectors (e.g. telecommunications,
A environment and financial services).
MYTH: The interests and concerns of the
South whilst opening up various sectors of
their economies, towards trade liberalization,
are protected under Art. XIX of GATT Treaty.
FACT: The reality is just the reverse! This was
evident as soon as the WTO came into being.
The services that were opened up were those that
were highly capital and technology intensive - in
which the advanced countries have a distinct
competitive advantage. Service areas, like
consultantcy and construction, in which India has
a comparative advantage, find no mention at any
time. Worse still the annex on “Movement of
National Persons Supplying Services" states that
the Agreement shall not apply to national persons
seeking access to the employment market of a
^Member...”
The North is constantly advocating free movement
of goods, services, capital, technology, etc., but
when it comes to the unhampered flow of labour
across the countries, it erects new barriers to repel
labour, including skilled personnel, from
developing countries. One cannot talk about free
markets and free capital flow and yet restrict free
flow of labour.
When the GATT Treaty was ratified, India was
forced to remove all restrictions on the entry of
MNCs in all sectors - banking, insurance, power,
telecommunication, deep sea fishing, media,
financial services, etc. The Foreign Service
enterprises, not interested in national priorities,
social commitments and obligations, indulged in
immense profit making at the cost of social good!
MYTH: Binding commitment to GATS ensures
the South economic growth and FDIs
FACT: There is, however, little or no evidence to
this claim. According to UNCTAD - on the basis of
its assessment of the impact of GATS
commitments on foreign investments — there is
no empirical evidence to link any significant rise
in FDI flows to the South with the conclusion of
GATS. The World Bank reports similar findings
for bilateral investment treaties (BITs), which
despite being typically more ambitious than
multilateral agreements like GATS, have also had
minimal effect in increasing FDI flows. Noting the
findings of a survey of FDI flows from OECD to
the South over 20 years, as well previous UNCTAD
research, the WB acknowledges, “countries that
had concluded a BIT were no more likely to
receive additional FDI than were countries without
such a pact". In fact, the evidence suggests that
the main factors determining where companies
invest in the South are the size of the economy
and, for the poorest countries, natural resource
endowments, not the level of government
intervention or the degree and nature of
multilateral commitments.
In the absence of any evidence to support this
claim, the rationale for making such commitments
is therefore reduced to one of “bargaining”.
Without any compelling economic or
developmental reason to legally bind and lock-in
investment policies, it only makes sense to do so
if a country wants the policies of another country
“locked-in” to benefit its own MNCs.
Furthermore, this drive towards further
commitments is especially problematic since there
is much doubt about the potential benefits of
further liberalization. Though the GATS treaty
demands it, a comprehensive and thorough
assessment of the effects of trade liberalization,
especially on the South, is still missing. Still further,
FACTS against MYTHS - October - November 2003
7
negotiations on other important aspects of GATS,
such as safeguard measures are not
progressing.6 Such measures would allow
governments to pull an “emergency break” if GATS
commitments would have detrimental effects on
the national economy.
WTO investment negotiations therefore come
down to some kind of national cost-benefit
analysis of whether the gains of locked-in market
access for a country’s MNCs outweigh the costs
of a country reducing its own policy space to
effectively regulate investment now and in the
future. However, this bargain is a particularly
difficult one to strike for the South. “The exchange
of reduced policy autonomy in the South for
improved market access in the North is a bad
bargain where development is concerned.”
5.
Chandiramani, Dr. N.M. World Trade Organisation and
Globalisation:.An Indian Overview, Shroff Publishers &
Distributors Pvt.. Ltd., Calcutta, 1999.
6.
“Water46'A Human Right: Stop Commodification Now",
Brot.^ur Die Welt, Stuttgart, Germany,2004.
7.
Ali, A. GATS and the World Development Report 2004:
The Neo-Liberal Plot, Lok Samvad, Delhi, March 2003.
8.
Das, B.L. Some Suggestions for Improvements in the
WTO Agreements, Earthworm Books, Chennai.
9.
“Opening the Floodgates: European Commission Asks
for Opening up of India’s Service Economy, Manthan
Adhyayan Kendra, Press Release, 27 February 2003,
Badwani (M.P.).
10.
Barlow, M. The Last Frontier, The Ecologist, # 1, London,
2003.
11.
“Social Services and GATS" in World Development,
#12, 2003.
The acronyms MNC (Multi National Corporation) and
TNG (Trans National Corporations) are often used
interchangeably. However, there are differences
between the two. A Company that has commercial or
business interests across the whole country is a
transnational company. An international company is
one that is collectively owned by a number of nations
or groups belonging to different nationalities.
Multinational corporations are very large international
companies with branches, subsidiary companies or
production units in several countries. For instance,
Coca-Cola, Pepsi, Ford, etc. Further, a transnational
corporation (TNC) repatriates its profits to other
countries and an international company interferes with
the profits of other States and then multiplies it.
References:
1.
http://www.gatswatch.org
2.
Raghavan C., GATS talks aimed at enabling export of
Andersen-style accounting? Third World Economics,
#275, Penang, 2002.
3.
Singh, K. Multilateral Investment Agreement in the
WTO, Asia-Pacific Research Network, Manila, 2003.
4.
Schalatek, L.Allies or Antagonists: Investment,
Sustainable Development and WTO, Heinrich Boll
Foundation, Washington, DC, 2003.
GiSO
GSSD
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