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--- In [EMAIL PROTECTED], "hengist" <[EMAIL PROTECTED]> wrote:
Special to CorpWatch
November 9, 2001
LONDON -- Three confidential documents from inside the World
Trade Organization Secretariat and a group of captains of London
finance, who call themselves the "British Invisibles," reveal the
extraordinary secret entanglement of industry with government
in designing European and American proposals for radical
pro-business changes in WTO rules.
One set of documents, minutes of the private meetings of the
Liberalization of Trade in Services (LOTIS) committee, obtained by
BBC television's Newsnight program and CorpWatch, record 14 secret
meetings, from April 1999 and February 2001, between Britain's chief
services trade negotiators, the Bank of England and the movers and
shakers of the Euro-American business world. Those attending the
closed LOTIS include Peter Sutherland, International Chairman of
US-based investment bank Goldman Sachs and formerly the Director
General of the World Trade Organization.
LOTIS is chaired by The Right Honorable Lord Brittan of Spennithorne
Q.C., who, as Leon Brittan headed the European Union. He currently
serves as Vice-Chairman of international banking house UBS Warburg
Dillon Read.
Other LOTIS members include the European chiefs of US service
industry giants Morgan Stanley Dean Witter, Prudential Corporation
and PriceWaterhouseCoopers. LOTIS is an outgrowth of the self-styled,
"British Invisibles," more formally known as the Financial Services
International London group. They were joined at various times by
specially-invited members of the European Commission's trade
negotiating team.
The minutes indicate that the government officials shared confidential
negotiating documents with the corporate leaders as well as inside
information on the negotiating positions of the European community,
the US and developing nations. At the meeting held on February 22nd
of this year, Britain's chief negotiator on the General Agreement on
Trade in Services (GATS) made reference to the European Commission's
paper on industry regulation which had been privately circulated to
LOTIS members for their comment.
GATS is a far reaching agreement that would affect every public
service
from healthcare and education to energy, water and transportation.
It would challenge national environmental, labor and consumer laws as
barriers to trade making these and other critical services totally
unregulated,
say critics.
Barry Coates, director of the WTO watchdog organization the World
Development Movement, said he was surprised to learn that the LOTIS
industry members received documents which the British government
had refused to give his organization, even papers "which they told us
did not exist."
Coates, in Qatar today to monitor the WTO confab, was somewhat
amused that the minutes indicate that LOTIS members, whose companies
represent over $100 billion in assets, seemed fixated on countering
the
arguments and actions of Coates' low-budget organization. Two of the
LOTIS meetings concentrated on hiring consulting firms and academics
to provide the government agencies with answers to the World
Development
Movement's arguments which question GATS and the wider globalization
agenda. The minutes noted that "the pro-GATS case was vulnerable when
the NGOs asked for proof of where the economic benefits of
liberalization
lay."
Reuters executive Henry Manisty offered his news service to the LOTIS
propaganda effort. Manisty told the LOTIS group he "wondered how
business views could best be communicated to the public." Reuters,
he said, "would be most willing to give them publicity."
"For a long time conspiracy theorists thought there had been secret
meetings between governments and corporations," said Coates. "Looking
at these minutes, it was worse than we thought. [The WTO GATS
proposals]
are a stitch-up between corporate lobbyists and government."
A Question of Necessity?
Besides having advance or exclusive access to otherwise confidential
governmental negotiating documents, the minutes indicate that the
industry chiefs, as members of the European Services Forum, held
exclusive meetings with the "Article 133" group, which sets the
European
Commission's trade policies. The Article 133 group's deliberations
are
supposedly confidential.
At least one such gathering with the Article 133 committee, held on
October 30th has been independently confirmed by investigators from
the Dutch think tank Corporate Europe Observatory.
Two other sets of documents suggest that LOTIS and other corporate
lobbyists appeared to have been astonishingly successful in getting
Western governments to adopt their plans to radically expand the
reach
of the GATS treaty. A confidential memo dated March 19th obtained
from
inside the WTO's Secretariat, written four weeks after the LOTIS
meeting
on the matter, indicates that European negotiators had accepted
industry-
favored amendments to GATS Article VI.4, known as the "necessity
test."
The necessity test requires nations to prove that their regulations --
from
pollution control to child labor laws -- are not hidden impediments to
trade. Industry wants the WTO to employ a necessity test similar to
the
one in the North America Free Trade Agreement which has worked to
reverse local environmental rules. For example, Mexico has been
forced
to pay $17 million to an American corporation, Metalclad, for
delaying the
operation of the company's toxic waste dump and processing plant.
Local Mexican officials had attempted to block the plant's operation
on
the grounds that it was built without a construction permit, and
would
not have received one, as the plant handling toxins was placed above
the area's drinking water supply.
According to the secret March 19 memo from the Working Party on
Domestic Regulation, issued to WTO members by the organization's
Secretariat, European negotiators reached a private consensus to
change
the worldwide GATS agreement to include a much stronger form of the
necessity test than found even in NAFTA. The Agreement between the
US,
Canada and Mexico only requires that a nation's regulations be "least
trade
restrictive."
Under the GATS, as proposed in the memo, national laws and
regulations
would be struck down if they are "more burdensome than necessary" to
business. The difference between the NAFTA language and the proposal
for GATS is subtle, but the effect would be enormous. The language in
the
WTO memo effectively removes trade from the equation. Rather, a
nation
would have to adopt rules which are, in the memo's words, the most
"efficient" -- that is to say those which carry the lowest cost to
business.
NAFTA on Steroids
The changes, as proposed, would slash regulatory controls over local
businesses as well as foreign operators seeking entry to a market. For
example, the State of California banned the gasoline additive MBTE
because pollutes ground water. The Canadian maker of the additive
has sued the United States under NAFTA on the grounds that banning
the chemical was not the "least trade restrictive" choice for
stopping
ground water contamination. California could have, the Canadians
argue,
chosen to dig up and repair thousands of gas station holding tanks
and
established a giant new inspection system. While the cost of the
alternative,
running into billions of dollars, could effectively force California
to back
away from protecting its ground water, it would permit Canada to
continue
to export the contaminant.
California is fighting Canada's interpretation of the necessity test
before
a NAFTA disputes panel. But under the language proposed for WTO, the
state would have no defense. Lori Wallach of Global Trade Watch,
Washington DC, calls the proposed language GATS language changes,
"NAFTA on steroids."
The WTO Secretariat's proposals follow lines suggested in another
confidential document from the European Community's Working Group
dated February 24 and entitled "Domestic Regulation: Necessity and
Transparency," issued just after LOTIS meeting on the matter with
European trade negotiators.
Spokespersons for Britain's Department of Trade and Industry, a
leader
in the EC Working Group, responded to our discovery of the documents
by stating that the GATS changes, as proposed, would still allow
nations
their "sovereign right to regulate services" to meet "national policy
objectives."
However, according to the confidential March 19 memo, in the course
of secret multilateral negotiations trade ministers have agreed that,
before a WTO tribunal, a defense of, "safeguarding the public
interest...
was rejected."
In place of a "public interest" defense, the WTO Secretariat suggests
in the memo that the trade body adopt an "efficiency principle." This
has the advantage, states the official Working Group paper, of
allowing
Presidents and Prime Ministers hostile to environmental protection
egulations to eliminate them -- not through votes of a nation's
congress
or parliament, but through an edict of WTO which a nation would be
powerless to reverse. "It may be politically more acceptable," says
the
memo, "to countries to accept international obligations which give
primacy to economic efficiency."
If, for example, the Bush Administration would rather not reduce the
arsenic contamination of water from mining operations, despite
congressional legislation and decisions by regulatory panels, it
could
eliminate the anti-pollution laws by acceding to orders of a WTO
disputes
panel that found regulation "more burdensome than necessary." Unlike
US congressional, regulatory and court proceedings, WTO disputes
panel
deliberations and submitted evidence are closed to the public and the
records sealed.
A World Trade Organization spokesman acknowledged the authenticity
of the March 19th note. However, he said the internal discussion
document
could not be read to suggest that WTO have the, "power to strike down
national laws or regulations."
Barry Coates of the World Development Movement disagrees, "At its
heart, it is a direct attack on the democratic process."
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Greg Palast can be seen today, Friday November 9th, reporting on the
WTO
Doha conference, on Britain's premier news program, Newsnight.
You can view this program live at 5:30 PM EST at
http://news.bbc.co.uk/hi/english/events/newsnight/newsid_248000/248099
.stm
AOL users <a
href="http://news.bbc.co.uk/hi/english/events/newsnight/newsid_248000/
248099
..stm">Click Here</a>
The program will remain at this location for 24 hours after which
time it
will be linked from http://www.gregpalast.com
Greg Palast is an investigative journalist who writes a column called
"Inside Corporate America" for the Observer, Britain's most respected
Sunday
newspaper. View all of Greg's columns at http://www.gregpalast.com
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