EPA negotiations alert message, 19 January 2006 *Request for information about impact of liberalisation of services in Sub Saharan Africa* The EPA negotiations in different regions will, or are likely to, include liberalisation of trade and investment in services. Liberalisation of services can have far reaching consequences. Since Article 5 in the GATS requires that regional agreements have to have “substantial sectoral coverage” and eliminate “substantially all discrimination”, many services sectors will be included in EPAs that liberalise services, even if Art.5 allows developing countries to liberalise less than developed countries in a free trade agreement. As this is done at the end of the EPA negotiation period, this is a dangerous process because experience has shown that if liberalisation of services is done too swiftly without the necessary assessments and regulations, there might be many negative consequences. Civil society organisations who want to campaign on the likely impact of liberalisation of trade and investment in services, have so far had little information available. Many macro-economic studies about liberalisation of services, as well as European negotiators, argue that it will bring more efficiency, better infrastructure and thus economic growth. However, more detailed studies assessing the impact for sustainable development show that poor people get excluded (e.g. from insurance or water services), small producers cannot participate (in the supply chain) or that governments loose their room to regulate in order to avoid negative outcomes. Many citizens in Africa have however seen the (negative) consequences of liberalisation of trade and investment in services sectors in Africa. In order to gather this information, this letter requests to all to write down what they have seen are the consequences of foreign services companies providing services, investing, or taking over local services suppliers. South African service companies have been active in Africa but also European and Asian ones. Services include the following sub-sectors: * Transport (by road, air, water,…) * Telecommunication * Electricity * Distribution (wholesale, supermarkets and other retail shops, trading companies) * Water services (including distribution to citizens) and sewage services * Financial services (banking, insurance including health insurance, services to support mergers and acquisitions (investment banking)) * Health services (private hospitals and health care services, etc.) * Education services (from private kindergarten to universities) * Tourism * Computer services * Building and construction * Media and culture services When describing the consequences of services provided by foreign companies, the following aspects could be among those included: * *Access*: Who has access in which region and what has changed? Which part of the population is being served? Universal access legislation and did it work (or lobbying by companies against it)? * *Prices*: Have prices gone down or up? Are the prices affordable by poor people? * *Economic consequences*: can local companies compete and survive the foreign competition? Do local companies in the same sector improve their services by following the example of the foreign companies? Can local entrepreneurs, and farmers in the case of supermarkets, supply to the foreign services companies? What are the efficiency gains and losses? Has infrastructure improved? * *Social consequences and human rights aspects*: Have jobs been lost or created? Have people more or less access to basic services? Are working conditions at foreign service companies better or worse (e.g. temporary contracts)? Are people expelled from where they live (e.g. for construction of foreign hotels)? Is corruption decreasing or increasing by provision of services by foreign companies? * *Environment consequences*: Is there destruction of the environment (e.g. for new buildings or roads)? More or less efficient use of water or energy? * *Privatisation*: Since liberalisation comes during or after privatisation, how has the privatisation process (decision to privatise, cost and benefits to the nation’s budget) and the consequences been? During the seminars and press releases by African citizens and parliamentarians in Hong Kong (WTO Conference, December 2005) some examples were given without too much detail, such as the case of closure of rural bank branches in Uganda by foreign banks, forcing teachers to close schools to get access to their salary. Who can write that story down? As well as many other experiences? Who has references to studies and research? The aim of gathering this information is to inform policy makers and civil society about the likely impact of services liberalisation under EPAs, and the regulations and policy measures that will be necessary if EPAs liberalise services. If you want to write down the experiences in your country about the entrance and operation of foreign services companies, please write to the following persons (preferably by e-mail or fax), _preferably before the end of February 2006_ (for the first round of write-up): (1) Myriam Vander Stichele, Centre for Research on Multinationals (SOMO) e-mail: myriam@somo.nl fax: + 31 20 639 13 21 address: Keizersgracht 132, NL- 1015 CW Amsterdam, The Netherlands (2) Karin Gregow or Peter Aoga, EcoNews Africa / Forum Syd e-mail: karin.gregow@forumsyd.org , or email: paoga@econewsafrica.org fax : +254 2 2725171 address: P.O Box 10332, 00100 G.P.O Nairobi, KENYA (3) Tetteh Hormeku, Africa Trade Network/Third World Network - Africa, e-mail: thormeku@twnafrica.org fax: +233 21 511188, or +233 21 511189 address: 9 Ollenu Street, East Legon,P.O. Box AN19452, Accra-North, Ghana The above persons would welcome some persons or experts from African who could join them in gathering and writing up the information that could be useful for the EPA negotiations. Please contact the above persons. ANNEX : For your information */(1) Extract from the statement :/* *African Parliamentarians Demand Ministers to Safeguard Local Markets and Peoples' Livelihoods at Hong Kong WTO Ministerial* , Press Release, 22 November 2005, Arusha, Tanzania « Services: Africas priority is to build the capacity of our local suppliers. African Ministers must maintain our stand and insist on retaining the flexibilities in the WTO’’s General Agreement on Trade in Services (GATS). The EU and US are currently pushing for aggressive liberalisation of Africa?s services sectors. Abdirahin Abdi of the East African Legislative Assembly comments, ‘Our ministers must not be coerced to undertake a formula to open up our services sectors or to enter into plurilateral or sectoral negotiations. This will lead to undue competition in our local markets from the already developed international service providers. If we are forced to open up prematurely, foreign service providers will suffocate our young and growing services industries.’ » Hon. Abdirahin H. Abdi, Tel: 255 744 431425 (Tanzania) or 254 722 510695 (Kenya), Email: abdirahimabdi@hotmail.com */(2) Extract from SEATINI website: /* “There is a paucity of data on trade in services. This create an opportunity to create mechanisms that meet the analytic demands of the sector to evaluate impact. A threat to this is the absence of a will to either assess or create useful methods of data collection. Lack of data will hide the actual impact of the GATS on services with no hope of correcting data collection in the short to medium term....” (http://66.102.9.104/search?q=cache:I8Zgwz2a6 A8J:www.seatini.org/+Africa+trade+in+services &hl=nl) Myriam Vander Stichele SOMO Keizersgracht 132 NL-1015 CW Amsterdam tel. + 31 (0)20-639.12.91 e-mail: m.vander.stichele@somo.nl www.somo.nl