Apart from Politics, Pressure from WTO, US, EU Drives Charter-Change Bid

Published on July 6, 2009

WTO Attacks Vs the Charter: the Case of GATS

When the country ratified the WTO in 1995, critics warned that aside from changing at least 40 national laws and regulations, the 1987 Constitution must also be modified to make it compliant with WTO agreements. The General Agreement on Trade in Services (GATS), for instance, committed the Philippines to extend national treatment to service providers from other countries, i.e. give them all the rights and privileges that are reserved to Filipino service providers. The national treatment clause of the GATS directly contradicts several constitutional provisions pertaining to services, to wit:

Section 11, Article XII, sets a 40-percent ceiling on foreign ownership of key public utilities including water and sewage, electricity transmission and distribution, telecommunications, and public transport

Section 11, Article XVI, restricts foreign ownership of advertising agencies to no more than 30 percent

Section 14, Article XII, reserves exclusively to Filipinos the practice of licensed professions (i.e. law, medicine, engineering, etc.) in the country

The EU, in a confidential document, urged the WTO members, among them the Philippines, to eliminate from their laws and constitutions barriers to foreign ownership of land, among others. It has, in effect, been lobbying for cha-cha.

GATS negotiations initially allowed room for countries to unilaterally choose which service sectors it wants or is ready to liberalize, presumably for reasons of national interest and/or legal/constitutional impediments. This means that Filipino GATS negotiators could only commit to the liberalization of services to the full extent allowed by the 1987 Constitution. But as the succeeding round of WTO negotiations (called the Doha Round) commenced, service TNCs based in rich countries pushed for greater liberalization and sought to compel poor countries to make deeper commitments in opening up their service sectors. Pressure was exerted on poor countries, first through a bilateral “request-offer” process wherein an individual member would send a request (i.e. a list of barriers to foreign investment in specific services, such as laws or constitutional provisions, that it wants eliminated) to another member, which in turn is expected to respond with an offer (i.e., which service sectors it is willing to liberalize).

The European Union (EU), which is home to some of the world’s largest service TNCs, has been at the forefront, together with the US, in pushing for the GATS. A set of confidential documents has been leaked by international NGOs a couple of years ago which shows the content of the EU’s GATS requests to WTO 109 members, including the Philippines. In the EU document on the Philippines, one would not find the phrase or term “cha-cha” or an explicit request to modify the 1987 Constitution. Instead, the document simply enumerates the identified service liberalization barriers and then proposes that such barriers be eliminated. For instance, on Page 3 of this document, one will find these entries:

Participation of foreign investors is limited for certain expressly reserved activities reserved by law to Philippine citizens (MA). EC request: Eliminate this requirement of citizenship…

Acquisitions of land (MA) require 60 percent local capital. Foreign investors may lease only private owned land. EC request: eliminate

By requesting that these prohibitions be “eliminated”, the EU is in effect lobbying for cha-cha to accommodate their “requests” under the GATS. This document, which the European Commission (EC) strictly instructed the Philippine government to ensure “is not made publicly available” and “treated as a restricted document”, [4] belies claims of EC head of delegation in the Philippines, Alistair Macdonald, and the Department of Foreign Affairs (DFA) that there is no European request for cha-cha. DFA spokesman Ed Malaya even argued that the “Philippines had long submitted its Constitutional provisions as reservations to any commitment under the GATS market access talks”. [5]

But the point is while such reservations have been expressed, there is a standing “request” (read: pressure) from the Europeans to eliminate the said constitutional barriers. That the liberalization of foreign ownership of lands, public utilities, and practice of licensed professions has been always among the economic amendments contained in cha-cha efforts of Ramos, Joseph Estrada and now Arroyo could only mean that the Philippines has been actively working to accommodate the GATS lobby of the Europeans. (Bulatlat.com)

(Read the concluding part)

Notes:

[1] “The party of Davos”, Joseph Faux, The Nation, 13 Feb 2006

2 “The perils of Cha-cha”, IBON Facts & Figures Special Release, Vol. 28 No. 10, 31 May 2005

3 “If you want liberalization, amend the Constitution – Arroyo”, GMANews.TV, 10 Oct 2008

4 GATS 2000, Requests from the EC and its member states to the Philippines

5 “EU not seeking Cha-cha in RP – envoy”, Philippine Daily Inquirer, 18 Jun 2009

Pages: 1 2

3 Responses to “Apart from Politics, Pressure from WTO, US, EU Drives Charter-Change Bid”

Norberto Cruz Says:
July 9th, 2009 at 8:10 am
This article is quite incisive in pointing out the real motivation behind the drive to change the constituiton. Clearly, GMA is not only banking on the support of the military but more importantly on the political and economic support of TNCs and their countries with inherently neocolonial foreign policy. The author is doing a great service for clarifying the issues to the struggling masses of our people. Great job, indeed!
US ‘Wish List’ Vs Philippine Constitution Drives American Lobby for Cha-Cha - Bulatlat Says:
July 9th, 2009 at 12:11 pm
[...] (Second of two parts, read the first part) [...]
bikoy.net | Cha-Cha Beyond Term Extension Motives Says:
July 10th, 2009 at 6:40 pm
[...] Apart from Politics, Pressure from WTO, US, EU Drives Cha-Cha Bid [...]