European Eye on Canadian Water - and More

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You have to hand it to the free-trade zealots in the federal Department of Foreign Affairs and International Trade(DFAIT). Almost nothing shakes them in their determination to stonewall, obfuscate, mislead and otherwise sucker Canada’s elected representatives.

To what end? To persuade them they have absolutely nothing to worry about in current World Trade Organization negotiations on services.

The official departmental theme song? Don’t worry, be happy. This despite a long string of unexpected losses for Canada at the hands of international trade panels.

It worked for a long time — until Canadian municipalities started examining the General Agreement on Trade in Services (GATS) and the radical changes (WTO) negotiators had in mind.

They discovered that everything from zoning and restrictions on store hours to the delivery of sewer and water services was being targeted.

Civic leaders were so concerned that their national body demanded exemption from the agreement and urgent talks with Ottawa. More than seventy municipalities — Winnipeg being the latest — passed their own strongly worded resolutions on the negotiations.

But provincial governments have been a lot slower to see through (DFAIT)’s bland reassurances. Although trade bureaucrats continue to tell the provinces that the (GATS) cannot “impinge” on their right to regulate, the cat is out of the bag.

A couple of weeks back, someone leaked a copy of the EuropeanCommission’s (EC) wish-list of Canadian institutions and regulations they want eliminated. This is by no means a complete list.

That won’t be revealed until the final stage of bargaining begins in 2004.

But even as a partial list, it is extremely aggressive and far-reaching. Any provincial politician who actually has an interest in governing should be galvanized into action by this document.

One of the biggest items on the EC’s hit list of services is water. The EC — which represents the European Union — is asking Canada to completely open all “water collection, purification and distributionservices through mains” to foreign competition. European water corporations dominate the global market for water treatment and distribution systems.

These multi billion-dollar corporations have enormous influence with their governments, and they want nothing less than completely unrestricted access to every water system on the planet.

A French water corporation executive has even invoked France’s history of conquest as the legacy to be restored through acquisition of watersystems worldwide.

The Europeans are targeting a whole range of other regulations in place in western provinces. For example, all three Prairie provinces and British Columbia have restrictions on foreign ownership of farmland — a provision aimed at guaranteeing the highest agricultural value of the land. The EC wants those restrictions done away with.

As well, all provinces have provisions making services provided by a government tax-exempt. The EC wants these provisions eliminated because they put foreign corporations at a disadvantage.

The EC is also targeting government monopolies, including public auto insurance. Saskatchewan, B.C. and Manitoba would be required to open their highly-successful and affordable systems to foreign corporations.

And the EC has specifically listed public liquor distribution systems as a barrier they want removed. This is not just a question of who sells alcohol (though B.C., Manitoba and Saskatchewan all make significant revenue from their corporations), but also a matter of public policy.

Combined with (GATS) attacks on other regulations (store hours, restrictions on the number of outlets, et cetera), the loss of public control over the sale of alcohol, means losing a crucial element in health and social policy.

As if deregulating alcohol isn’t bad enough, the EC also wants to liberalize the sale of tobacco.

If Canadian governments decide to privatize a service, the EC wants Canada to remove any rules designed to ensure the privatized operation remains in Canadian hands. They want all limits on foreign acquisition removed despite the fact that European countries themselves maintain these limitations. Hypocrisy is no barrier to success in the free-tradenegotiations.

What is most disturbing about the EC’s aggressive targeting of Canadian regulations is that Canada has brought this on itself. In the secretive world of trade negotiations, Canadian officials are constantly boasting that Canada has taken the lead in pushing for expanded liberalization of services. Virtually every public service is now vulnerable.

Canada’s negotiators, unleashed by a long succession of eager and naïve trade ministers, have played a dangerous game of redefining important public-policy initiatives, principles and objectives as “barriers to trade.”

This is despite the fact that Canadian business has shown a decided lack of interest in the negotiations, and wants trade officials to focus on more immediate problems. Now Canada’s single-minded focus on opening up other countries’ services has come back to haunt Canadians.

And it is provinces and municipalities that will pay the greatest price because that is where the bulk of regulatory activity over services takes place. Ottawa is negotiating in the provinces’ constitutional backyard. Trade officials on both sides of the Atlantic get very agitated about any criticism of the GATS. Theirs is a looking-glass world: While asking for elimination of regulations, they don’t want to be accused of calling for deregulation.

And while calling for an end to public monopolies, they don’t want anyone saying that what they’re really up to is privatization.

Of course, just because the EC asks for something doesn’t mean Canada has to agree. But this is a bargaining process — if Canada wants something from Europe, then Canada has to give something up in return. Trade Minister Pierre Pettigrew has repeatedly told Canadians that public health and education are not on the GATS table.

He has argued that while Canada is seeking access to other countries’ health and education “markets” (by asking that they open up public systems to private competition), it doesn’t mean Canada must open up its public systems.

That’s a glib answer. Just what is Canada going to put on the bargaining table in exchange for European countries opening, say, their health systems to Canadian companies?

Whatever it is, it will have to be significant, because health is a huge investment plum. And the EC is a big player — second only to the United States in its bargaining clout.

In the last-minute bargaining that will occur in the GATS negotiations, what will Canada give up? Specifically, what provincial and municipal laws, regulations and public services will be sacrificed? Once tradeoffs are made, provinces can complain all they like but there will be no going back. Every concession is part of the whole bargaining web from which no single strand can be withdrawn.

Provincial governments had better pay attention now, because they won’t be at the table when the final deals are made.

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