Hampshire County Council
Executive Member - Recreation and Heritage Item 4
12 December 2002
Consultation on GATS Proposals for Cultural Services
Report of the Director of Recreation and Heritage
Contact: Michael Fuller Ext: 6016
1. Summary
1.1 The following decision is sought which will form the basis of a response to the Department of Trade and Industry (DTI) on its consultation on the General Agreement on Trade in Services (GATS) negotiations. With regard to the relevant cultural area it is requested that no commitments are made for recreation, sporting or cultural services and that efforts are made to create an international agreement for the protection of diversity in education, culture and media to include the regional dimension.
2. Reason
2.1 To contribute the cultural elements to an overall response by Hampshire County Council to the consultation on the GATS negotiations by the DTI.
3. Other options considered and rejected - None.
4. Conflicts of interest declared by the decision maker or a member or officer consulted - None.
5. Dispensation granted by the Standards Committee - Not applicable.
6. Reason(s) for the matter being dealt with if urgent - Not applicable.
Approved by: (signature) Date: (date of decision)
Councillor J. Waddington
.................................... ..................................
Hampshire County Council
Recreation & Heritage Policy Review Committee Item 7
21 November 2002
Executive Member - Recreation and Heritage Item 4
12 December 2002
Consultation on GATS Proposals for Cultural Services
Report of the Director of Recreation and Heritage
Contact: Michael Fuller Ext: 6016
1 Summary
1.1 This report provides the basis of a response to the consultation exercise by the Department of Trade and Industry (DTI) on the World Trade Organisation (WTO) General Agreement on Trade in Services (GATS) negotiations. It also proposes that Hampshire County Council supports the Brixen Declaration of the Assembly of European Regions in calling for an international agreement for the protection of diversity in education, culture and media to include the regional dimension. This report is mainly concerned with the elements of the GATS negotiations dealing with recreational, sporting and cultural services.
1.2 The views of the Members of this Committee combined with those of other County Council Policy Review Committees concerned with the issues of the consultation will be combined as a response to be brought together by Cabinet and then can be forwarded to the DTI before the deadline, 3 January 2003.
2 Introduction
2.1 The current round of GATS negotiations were mandated under the previous negotiations (called the Uruguay Round) in 1993.
The new round of broad-based negotiations within the WTO was launched as part of the Doha Development Agenda with the aim of concluding them by 1 January 2005. The new consultations have a deadline of 31 March 2003 for the submission of initial offers. Offers are needed within the negotiations if they are to be subject to GATS. If no offers are made or received then GATS will not affect the activity involved.
2.2 In preparation for these negotiations the DTI published its position. The background information for the negotiations appears on the DTI website at: www.dti.gov.uk/worldtrade/service.htm.
From over 100 replies from the business community of the UK the DTI has determined support for further trade liberalisation, a view shared by other European Community (EC) states. (Member States of the EC negotiate in the WTO as part of the EC.)
2.3 Public concerns about the GATS negotiations have been well publicised through the press and the media. These concerns have been broadly about the following:
· governments' ability to maintain public services where they chose to do so;
· the right and ability of governments to regulate services in order to meet national policy objectives;
· the impact of liberalisation on developing countries; and their ability to participate effectively in these negotiations; and
· a wish for greater transparency, including consultations with all stakeholders.
2.4 The WTO and the EC Commissioner have published documents which attempt to allay the concerns of the public and organisations across the globe. However some, including the Assembly of European Regions, are still concerned about the scope of the GATS negotiations and their possible impact.
3. The Requests
3.1 So far requests for liberalisation of services in EC countries have been received from 19 WTO members. It is expected that this number will increase. However, the focus of this consultation is on requests to the EC and the UK. They are considered under different economic headings. The heading of interest to this Committee is that titled 'recreation, sporting and cultural services'. The concerns are mostly about public services. The EC has said in its requests that it is not seeking the dismantling of public services or state-owned companies. It is however seeking non-discriminatory market access opportunities for private suppliers where countries choose to open their services to private supply alongside public services. Privatisation is not in itself an objective of GATS and cannot be forced on any government through the GATS process. On the other hand changes in the way a country might want to organise its public services may be restricted if GATS challenges are made.
3.2 Although this report is concerned only with the requests for one sector, other possible service sectors of interest to Hampshire County Council are 'legal services', 'accounting, auditing and bookkeeping and taxation services', 'architectural and engineering services (including urban planning)', 'computer services', 'education services', 'environmental services' and 'tourism and related services'. Other Policy Review Committees may be looking at these areas.
4 Recreational, Sporting and Cultural Services
4.1 Certain requests have been made to the EC which may affect the UK. These have been made to:
-entertainment services
-news agency services
-libraries, archives, museums and other cultural services *
-sporting services including maintenance of facilities, refereeing, performance and
-coaching and training or instruction *
-cinema ownership and operation
-the elimination of discriminatory subsidies for entertainment and sporting services
Of particular interest to this Committee are those in relation to the third and fourth marked * in the list above.
4.2 The DTI sees no threat to the present structure of libraries, archives, museums and other cultural services. On the other hand the sporting services are of concern to the DTI. The DTI would want to resist the elimination of grants to support organisations and individual athletes of Britain and would resist having to make these available to those from abroad.
4.3 The DTI is more relaxed over the libraries, archives, museums and other cultural services as no requests have yet been made. This reflects a cautious approach of the EC to GATS commitments in the cultural area and the need to ensure the continued provision of public library and museum services. The Department requests the views of those interested in these services to see if they would like to make or receive commitments or requests in these areas.
5. Concerns about the Cultural Services in GATS
5.1 The media have frequently raised worries about the GATS negotiations. They say that these negotiations might open up public services to increased competition and undermine the democratic control of areas such as cultural services and education. The aim of treating foreign and national suppliers equally could allow equal subsidies to be claimed by foreign suppliers equally to those supplied by Hampshire County Council.
5.2 The possible proposals could forbid authorities from cross subsidising services. For example, the Library Service lends videos to the public with a subsidy. An American company, for example, could provide a similar service as is actually happening in Hampshire at the moment and claim an equal subsidy from the County Council. This might also happen in providing education services to the public whereby public schools run by foreign companies might claim equal subsidy as those provided by the County Council. Foreign theatre companies operating in the county might also claim subsidy for their operations in the same way as other companies which are supported by local authorities. Ambitions of widening access and countering social exclusion might be undermined by rules aimed at removing 'irrelevant' restrictions on trade.
5.3 Although those at the DTI involved within the GATS negotiations are satisfied that the public services are protected, many on the outside are not so sure. Many organisations, non-governmental organisations and charities have voiced concern, as has the Assembly of European Regions at its recent conference for regional ministers of culture. For example, the International Federation of Library Associations and Institutions (IFLA) based in The Hague, Netherlands have published a paper on the GATS issue. It says it has a specific concern over libraries.
5.4 This paper says that GATS has the potential to open up all aspects of a national economy to foreign competition including public sector services such as libraries. Corporations can be set up in any Member State to compete against public services. In such instances, the foreign corporation can challenge government support for public sector service and could claim equal treatment, which would mean the same level of subsidy as the public service. All levels of government, local, county and regional, are included in the agreements covering a Member State.
5.5 The GATS negotiations do not apply to 'services supplied in the exercise of government authority'. Critics have argued that the WTO will interpret this clause very narrowly. The GATS itself states 'a service supplied in the exercise of government authority means any service, which is supplied neither on a commercial basis, nor in competition with one or more service providers'. With the advent of for profit on-line content providers targeting individual users of education services and public libraries, the potential for GATS challenges to the library service is increasing. While the concept of allowing 'competition' appears benign, the eventual outcome of such challenges will be the undermining of the tax-supported status of public sector libraries at the national, regional and local levels. Without tax support, libraries' role as democratic institutions, making available the widest range of material reflecting the diversity of society, will be compromised.
5.6 The Brixen Declaration of the regional ministers and political heads of education, culture and media departments as organised by the Assembly of European Regions was agreed on 18 October 2002. This is attached as an Appendix. This states that the ministers are concerned over the implications of the GATS negotiations, which may have undue influence over publicly funded activities in the fields of education, culture and media. They say that, as these services need to be under the control of democratically accountable organisations, they demand that local government should be involved in any negotiations on these issues. They also say that the EC should make no commitments with regard to them and thereby exclude them from the negotiations.
5.7 The Brixen Declaration also highlights the need for an international agreement for the protection of diversity in education, cultural and media to include the regional dimension. It is envisaged that the AER will communicate with UNESCO with a view to this body taking forward such an agreement, which will have such force that the GATS will not be able to rescind it.
6. Response to the DTI
6.1 Hampshire County Council's Corporate Strategy is primarily concerned with the quality of life of its citizens. It currently provides cultural services in support of this ambition, which are decided through established and publicly accountable democratic procedures. Therefore, the County Council has valid concerns if this state of affairs is to be affected through the consequences of unlimited involvement of the private sector. The main elements of the Brixen Declaration can be used in the response.
6.2 It is proposed that the government and the EC is urged to make no requests or commitments in the field of recreation, sporting and cultural services.
6.3 In order to achieve international agreement the County Council should pursue this through the Local Government Association and the Assembly of European Regions. The Association's main Executive Committee and its European and International Executive have received reports on these issues and have agreed that the Association should express the growing concern amongst local authorities at the national level.
Recommendation
That the following points be submitted to the Executive Member for Recreation and Heritage for his consideration:
1. that Hampshire County Council makes a response to the current government consultation on the GATS negotiations to include reference to the sector for recreation, sporting and cultural services
2. that this response should include a request to exclude the areas of recreation, sporting and cultural services from liberalisation as this might take them out of democratic control
3. that efforts should be made through the Local Government Association and the Assembly of European Regions to establish an international agreement for the protection of diversity in recreation, sporting and cultural services to include the regional dimension
Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
Published works
Documents which disclose exempt or confidential information as defined in the Act.
TITLE LOCATION
Brixen Declaration AER file, Arts Office
IFLA Position on WTO (2001) AER file, Arts Office