EN Official Journal of the European Union CE 88/593

(2004/C 88 E/0606)

WRITTEN QUESTION E-0208/03

by Patricia McKenna (Verts/ALE) to the Commission

(3 February 2003)

Subject: General Agreement on Trade in Services

What steps has the Commission taken to assess the implication of the General Agreement on Trade in Services (GATS) on public services in Member States?

If the Commission has not commissioned an independent assessment of the implications of GATS on public services in Member States, does it have any plans to do so?

Answer given by Mr Lamy on behalf of the Commission

(6 March 2003)

Given the scope of the General Agreement on Trade in Services (GATS) and the flexibility the agreement leaves World Trade Organisation (WTO) Members to design their commitments the GATS poses no threat to public services in the Community or elsewhere. The Commission has, therefore, not felt the need to commission an independent assessment as suggested by the Honourable Member.

In that connection it should be recalled that there are a variety of ways in which the public and the private sectors today interact to provide public services. How much the public versus the private sector is involved depends on the national traditions and legal conditions prevailing in the countries concerned. Public services are today, for example, provided by public providers directly (through traditional public institutions) or indirectly (through public undertakings on a commercial basis). In some cases Members entrust the provision of public services to a private supplier operating under special or exclusive rights. In other cases Members rely entirely on private markets. Furthermore, experience has shown that in some sectors involved with the provision of public services there are ways to open such sectors to competition while still safeguarding and in many cases improving the availability, quality and affordability of such services. For example, long-distance fixed-telephony prices have fallen by 49 % following liberalisation of the telecommunications sector in the Community without endangering the availability and quality of the service. In fact availability of mobile phones have increased from 22 % to 73 % and internet penetration has increased from 8 % to 36 % since the sector was opened to competition. The new telecommunications regulatory framework aims at enhancing the level of competition whilst ensuring the provision of a minimum set of services to all end-users at an affordable price through the Universal Service Directive (1).

The GATS take full account of the diversity of arrangements Members rely on to provide such services and leaves it entirely to Members to decide on which model to pursue.

First, public services that are neither provided on a commercial basis nor in competition with one or more service suppliers are not subject to the agreement by virtue of Article I:3 (c) in the GATS.

Second, even for public services that are covered by the GATS several policy options are open to WTO Members under the Agreement such as:

— Excluding from its commitments those sectors where it believes an opening to competition could threaten the availability, quality and affordability of such services. Thus Members can maintain the service as a monopoly, public or private.

— Opening the service to competing suppliers, but to restrict access to national companies.

— Opening the service to national and foreign suppliers, but make no GATS commitments on it.

— Making GATS commitments covering the right of foreign companies to supply the service, in addition to national suppliers. Members are free to tailor the sector coverage and substantive content of such commitments in a way that is consistent with other legitimate policy objectives. They can exclude from commitments any activity where foreign competition is unwanted and can schedule limitations on the level of market access and national treatment committed.

— Enacting domestic regulations, legislation and other measures to safeguard the public interest. For example, Members can while opening a sector to competition design and implement policies aimed at ensuring the availability, quality and affordability of essential public services, such as universal service obligations.

The Community and other Members have, whenever deemed necessary, used the flexibility described above to safeguard their public services and there is no evidence that the GATS has affected public services within the Community.

(1) Directive 2002/22/EC of the Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services, OJ L 108, 24.4.2002.