WRITTEN QUESTION E-0208/03 by Patricia McKenna (Verts/ALE) to the Commission. General Agreement on Trade in Services.
Date: 2003-02-03
Institutions: European Parliament, Provisional data
Subjects: EU Member State, GATS, economic analysis, public service, universal service

8.4.2004

EN

Official Journal of the European Union

C 88 E/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:

(cid:1) 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.

(cid:1) Opening the service to competing suppliers, but to restrict access to national companies.

(cid:1) Opening the service to national and foreign suppliers, but make no GATS commitments on it.

(cid:1) 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.

C 88 E/594

Official Journal of the European Union

EN

8.4.2004

(cid:1) 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.

(2004/C 88 E/0607)

WRITTEN QUESTION E-0247/03

by Charles Tannock (PPE-DE) to the Commission

Subject: Potential abuse of the EU Association Agreement

(5 February 2003)

The new EU Association Agreement with Chile, to which the Parliament is soon likely to give its assent, is
a wide-ranging and in many ways groundbreaking agreement with a non-candidate state which will be
widely welcomed on both sides of the Atlantic.

The Commission has also indicated that in the opinion of the Commission, the agreement is fully
compliant with World Trade Organisation (WTO) obligations.

Could the Commission indicate, however, what control mechanisms exist to ensure that tariff-free access is
not abused by companies based in countries which are not parties to the agreement using the European
Union as a conduit for tariff-free exports to Chile or using Chile as a conduit for tariff-free exports to the
European Union?

Answer given by Mr Lamy on behalf of the Commission

(21 February 2003)

The trade pillar of the Union-Chile Association Agreement is indeed one of the most innovative and
ambitious agreement ever negotiated by the Community with a non-candidate country. The trade part of
the agreement entered into force (on a provisional basis) on 1 February 2003.

As indicated by the Honourable Member, the Commission considers that such an agreement is compatible
with the requirements of the WTO, in particular Article XXIV of the General Agreement on Tariffs and
Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS).

As in all agreements containing a free trade area in goods, in order to benefit from tariff preferences, a
product when exported must be considered as originating either in the Community or in Chile. For this
purpose,
it must comply with the rules of origin established in a specific annex to the Agreement
(Annex III and its appendices). In this respect, when the product exported is not ‘wholly obtained’ in one
of the two Parties, goods imported from third countries must undergo sufficient working or processing in
compliance with the specific origin rule set out for the final product to be exported (in practical terms this
means that it is not possible to export a product from e.g. Brazil to Chile and re-export the same product
to the Union under preferential treatment granted under the Union/Chile Agreement).

When goods are deemed to be originating, they must be accompanied at importation by ‘proofs of origin’
clearly defined in the Agreement. Additionally, the above-mentioned Annex III contains provisions on
‘administrative co-operation’, which provide for verification procedures of the originating status of the
goods to be carried out in collaboration between the authorities of the two Parties (1).

Furthermore, possible disputes on verification procedures may be referred in the first place to a specific
Committee (Special Committee on Customs Co-operation and Rules of Origin).