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v17_2006i - Looking for Facts in the GATS Attack Impacts on...

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8 L OOKING FOR F ACTS IN THE GATS A TTACK : I MPACTS ON S OCIAL S ERVICE S OVEREIGNTY Katherine Walraven This paper investigates the implications of the General Agree- ment on Trade in Services (GATS) for members’ regulatory sovereignty over social services. It presents the moderate view that, while some of the outcomes envisioned by those op- posed to the agreement are unlikely, they are not impossible and there is therefore some cause for concern. Legal ambigui- ties and gaps in the GATS undermine how both civil society and World Trade Organization (WTO) members perceive it, limiting its credibility and future scope. The essay concludes with recommendations aimed at improving the reliability and credibility of the agreement in order to increase the degree of trade occurring under its purview. I NTRODUCTION Almost fifty years span the gulf between the birth of the General Agreement on Tariffs and Trade (GATT) in 1947 and that of the General Agreement on Trade in Services (GATS) in 1995. This gap reflects both the limited role that services have traditionally played in the global economy and their conventional treatment in public finance. Aside from certain sectors integral to the exchange of goods, such as international finance and naval transport, trade in services has traditionally occurred intra-nationally, with considerable government involvement. It thus comes as little surprise that Katherine Walraven is a Master of Arts candidate at the Norman Paterson School of International Affairs, Carleton University ([email protected]).
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152 Katherine Walraven the GATS has met with resistance, despite not being as familiar to the public as the GATT. Central to the controversy over the agreement is the question of how it affects the right and capacity of members to regulate services, especially social services such as health and education which play a central role in human welfare and development, and are particularly susceptible to mar- ket failure. On the one hand, it is important that governments retain the ability to regulate the delivery of social services, so as not to leave them entirely to the invisible hand of the market. On the other, even if not intentionally protectionist, social service regulatory measures can serve to shield local markets from competition, slowing the flow of trade and limiting the potential economic benefits of liberalization. GATS supporters herald the agreement as a landmark success, carefully crafted to further free trade while protecting the right and responsibility of members to govern in the public interest. Opponents claim, however, that the agreement risks irreversibly limiting the regulatory jurisdiction and choice of WTO members to the detriment of social service efficiency, equity, and quality.
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