Pascal Lamy and the rest of his ideas. It did not take long to see who was right. Two days after the disputed Doctorate at the Catholic University of Louvain (see this section of 5 February), Pascal Lamy presented his intentions over the EU's offers regarding the liberalisation of the services sector internationally, assuring that the education and teaching sector and that of culture were not up for grabs (see our bulletin on 6 February, pp.8/9). Those students that had tried to oppose the European Commissioner's being granted an Honorary Doctorate accusing him of opening up these sectors to world trade were thus off the mark. From this point of view, Pascal Lamy remains the defender of the European model of society and national cultures (at the same time of Western backing for developing countries) in the forthcoming negotiations within the WTO, World Trade Organisation. The small polemic may thus be closed by the following conclusions:
a) it is positive that students should be concerned at what is happening in the WTO and that they should remain vigilant. This is proof that they have understood the importance of the work of international organisations, which previously discussed and acted in the most total darkness. If the demonstrations of Louvain-la-Neuve contribute to drawing public attention to these issues, they are welcome, despite their mistakes.
b) it is less positive that the students should not have bothered to look further into the EU's stances and actions, and that they precisely targeted their criticisms against the one person trying to guide the work of the WTO towards the interests of the less well-off countries and to introduce greater environmental and social concerns into globalisation. I have under my eyes a photo (published on the front page of a Belgian newspaper) the demonstration of Louvain-la-Neuve, showing demonstrators waving banners where one can read "AIDS, 10,000 dead a day, Lamy accomplice". At that level we are playing with ignominy, when one knows Pascal Lamy's efforts at getting multinational pharmaceutical companies to cut the price of anti-AIDS medicines for poor countries.
The audio-visual sector affects our culture. But this is an anecdote. What matters, are the principles and interests at stake. The one aspect on which the students focused, that of education, is not the most important, as it seems obvious that the EU will not agree to international obligations of liberalising that sector. Here, each Member States applies the laws of its choice, and that means that that sector comes under subsidiarity. If the powers remain "national" within the EU, how to imagine it agreeing at world level limits to the autonomy of choice that is guaranteed to Member States at European level? Other issues are muck more difficult and controversial, especially that of other services and the audio-visual sector. These are areas that directly affect the European model of society and culture, thus our civilisation. What did we learn last week?
The principles. Pascal Lamy did not reveal the detailed contents of the negotiating offer on services as a whole, that the Commission will present in Geneva end-March. The reason is not that he intends giving the European stance a confidential nature, but that he wants to let the European Parliament (through its competent committee) and Member States (in the framework of the Council) provide him with their remarks. It will be a simple consultation, in the sense that the Commission, when acting in the framework of directives the Council has defined in its time, is autonomous in how it conducts negotiations; but Lamy considered it logical to listen to the parliamentarians and ministers, and to take account of their remarks if they have "sound arguments" to put across (see his declarations in our bulletin of 6 February, page 6). The backing of the EP and Council is essential for the Commissioner as at the negotiating table his position is all the stronger if third parties know that he has the other institutions and Member States behind him. While waiting to set out the details, Mr. Lamy set out the major outlines and principles. According to what he declared and other available indications, and given the details published in our bulletin on 8 February (page 14), the European offer is based on the following:
- the EU is in favour of free competition in the field of services, which represent an essential and growing element of its economy. It is, therefore, ready, on condition of reciprocity, to open up to international competition banks, insurance, financial services, mass retailing, services to companies, tourism, legal services, environmental services, etc.;
- in the field of public services, health, education (including higher education) and the audio-visual sector are not open to competition; …/..
Other public services like transport, energy, post and telecommunications could be liberalised insofar as they are within the EU. But third country companies will be subject to the same universal service obligations as private and public European companies.
The EU may withdraw one or more of its offers if it does not obtain satisfactory reciprocity (in the same sector or elsewhere, since the balance of the concessions will be assessed overall).
What third countries want. Negotiations will be tough in Geneva since some of what third countries are calling for involve areas the EU sees as non-negotiable. The most macroscopic case is broadcasting (including cinema) which eleven third countries have included in their list of areas to be liberalised, and more will follow before 31 March. These countries are not calling for full liberalisation - they have disparate demands that do not always cover market access. They are understandable - Europe is an open market, films from around the world are shown there and limits on their distribution arise for consumer demand. The "restrictions" (if they can be called that) applied by Europe are compulsory quotas for European films and also production aid mechanisms, measures that in practice could only disturb the United States (whose export capacities are virtually limitless) and possibly Brazil (for televised soaps).
According to the evidence I've been able to collect, there is a huge range of demands from third countries. Two countries, Brazil and Japan, are challenging European quotas, but Brazil wants TV quotas scrapped, and Japan cinema quotas (the reasons for this divergence are understandable). China reportedly wants to be able to invest in the construction of cinema complexes in Europe, while India is concerned with the freedom to make films. Apparently the requests of Mexico, Uruguay, South Korea, Taiwan and Hong Kong are also specific. What about the United States? Prima facie, they are quite moderate - they are calling for a consolidation of the current situation. It is serious, in fact, since in GATT jargon consolidation means that any change to the consolidated regime should be negotiated and give rise to compensation. The US position with regard to the European market is powerful enough that the US is happy with it (broadcasting is the main export sector for the Americans).
What has been won. It is possible that requests not covering cultural aspects but purely economic content may be acceptable to Europe. The negotiators will assess them. What appears to have been won, going by the strong position taken by some Member States and the remarks by Pascal Lamy, is that the EU will have no flexibility or room for negotiation for education, health or broadcasting. The Council's negotiating guidelines note that the Commission has to "guarantee Member States the option of developing their cultural and broadcasting policies in order to preserve their cultural diversity;" The phrase may not be very elegant, but it is clear. The situation is similar for health and education.
Vigilance not suspicion. So why the agitation that one sees at the European Parliament and in some government milieus, particularly in Belgium? The non-governmental movements (Socialist and Christian trade unions, ATTAC, Oxfam, etc) that organised a demonstration in Brussels on Sunday to oppose concessions over public services and call for the GATS negotiations (General agreement on trade in services) to be suspended, are right to be vigilant and alert public opinion, but they should not make accusations of hidden agendas or attack people fighting to defend the same guidelines. On the contrary, they should see them as their best allies, and support their efforts. The European Commission is not in the pay of the multinationals, one should note, and most MEPs are not either. As for recommending the failure of the negotiations, this should be reflected upon, since the great losers could be developing countries and Europe itself. Developing countries have an absolute need to improve the quality of the services they offer their people and foreign investors they want to attract, since this is the basis of any serious development policy. As for the EU, services have become its priority sector of the economy - accounting for two thirds of jobs and more than 60% of GDP, and are by far the main export sector (Europe covers 25% of global service trade, compared with 19% of the global goods trade). Greater opening of world markets in this area would be a colossal support for increasing jobs and reducing unemployment. So it would be counter-productive to block the negotiations, assuming of course that the pledges Pascal Lamy has indicated are actually stuck to, not only as the negotiations begin but also during the entire bumpy road of the talks.
My conclusion is simple - vigilance, yes, but a priori suspicion would be a mistake. Let us trust Europe and its institutions from time to time. (F.R.)