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EU parliamentary group on public services raises alarm bells about CETA

The June 8 European parliament resolution on Canada-EU trade contained a clause on public services, which

Notes that the Commission has chosen a ‘negative list approach’ for the liberalisation of services, but considers that this should be seen as a mere exception and not serve as a precedent for future negotiations; considers that the GATS public utilities exemption remains the most appropriate tool to guarantee universal access to public services to citizens;

That same day, a parliamentary intergroup on public services, comprised of MEPs from all political parties, issued a press release called Vive les services publics canadiens libres! The release explains how a negative list approach already threatens public services, but that the European Commission’s desire to limit the definition of what counts as public creates added dangers in the EU and Canada.

“For the first time,” says the release (translation mine), “the European Commission, which is negotiating the agreement with Canada, wants to include all services a priori. In other words, instead of listing those services which will be covered by the commercial agreement, as international legislation permits, the Commission will consider all services to be automatically covered, including many public services, except for those excluded by each EU member state, as per a ‘negative list’ approach.”

Canada is used to the negative list as a way to exclude sectors it wants to protect in trade agreements. Federal negotiators claim you end up with a more “ambitious” final agreement that way, where ambitious means fewer sectors are protected. But CETA will be the first and the EU parliament clearly hopes the last time EU member states will have to pore over all their services looking for exclusions. Make a mistake, forget to include something related to health care, energy, water, etc and you risk opening the door to competition or privatization in those sectors.

An internal European Commission document cited by the intergroup release, which is available on the website of the European Federation of Public Service Unions (EPSU), states, “The current ‘public utilities’ GATS exemption is increasingly not defensible and difficult to maintain in the context of negotiations with ever more developed bilateral trading partners.” The document explains, “We have important offensive interests in certain privatised public utilities/services, notably in telecommunications, postal, and energy.” The Commission is concerned that it can’t expand its market access abroad in these and other sectors unless it’s willing to clarify a minimal definition of what is public at home.

A letter from EPSU to the Commission dated May  13, 2011, contests this opinion, referencing other Commission papers related to CETA which were discussed at EU trade committee on May 12. These papers list a broad range of potential public services to be included or not in the CETA negotiations. The EPSU letter states:

There appears to be possibilities to liberalise everything except government itself, and we find it particularly disturbing to see references to the “collection, purification and distribution of water” and to health and social services. On healthcare, it is reported that “Some Member States (MS) plan to take additional reservations for privately funded services as well. Once all MS data is available, [the Commission] will review reservations to see whether a common EU-wide reservation for national treatment is appropriate.” We do not see on what basis, or on what criteria, the Commission could do this. As Commissioner Alumnia recently said (speech on State Aids 2 May), “One challenge is that our action spans different institutional and cultural traditions. The notion of economic activity, for instance, changes across national systems and laws…. an example… the Spanish national health system cannot be regarded as an economic activity.” The papers however refer to the Commission‟s intention to reflect the “EU understanding‟ of non-economic services.

EPSU claims the Commission’s initiative to open up more public services to trade “is not in conformity with its legal responsibility to respect and implement Treaty provisions, in particular the Protocol of Services of General Interest (SGI), which calls for ‘a high level of quality, safety and affordability, equal treatment and promotion of universal access and of user rights’ and the Charter of Fundamental Rights, which includes the right of access to public services.”

The federation argues, “Liberalization and privatization of public services may change ownership structures but this does not lead to highly competitive public service markets or to better services.” They stress in their May 13 letter that the European Parliament has not offered its support to the idea that excluding public services is no longer desirable in trade negotiations. In fact, the June 8 parliamentary resolution on CETA proves the opposite — that MEPs of all parties are not at all inclined to open up public services as the Commission and, from the looks of these newly published CETA documents, the Harper government would like to see.