New study: Trading away public policy space?
In his study ”Trading away public policy space?”, Markus Krajewski, professor of public and international law, created a risk analysis of the latest WTO attempts regarding trade policy interventions in the Services Domestic Regulation. A safeguard clause – in the public interest – shall protect regulations such as public services or environmental protection with more legal certainty against trade policy liberalisation pressure through the backdoor.

According to Krajewski, the current WTO “Joint Initiative on Services Domestic Regulation” shows an ambivalent picture: on the one hand, already planned particularly offensive instruments such as the necessity test are not included. This can be seen as positive, as it – in the public interest –  would have put a number of regulations under pressure. Hence, a necessity test would entail the risk that for example public service obligations and environmental impact assessments would be rated as trade barriers, which are “more burdensome than necessary”. On the other hand, even the current less offensive WTO attempts would pose continuous risks concerning a Corporate Capture, and this might be legitimized by intensified lobby activities against regulations in the public interest.

Containing corporate interests

The former Director of the Canadian Centre for Policy Alternatives, Scott Sinclair, particularly emphasised that the current departure from the “necessity test” is thanks to the long-standing criticism by representatives of the Global South and civil society stakeholders. At the same time, he proposed to closely watch such negotiations. National governments would frequently use such agreements to create a form of “self-internalisation” concerning market-conform regulatory policy. Apart from that, it had been apparent for decades that transnational corporate lobbies would push this agenda time and again. Sinclair underlined that, if big already privileged transnational companies were equipped with new instruments, which they could use to challenge totally free anti-discriminatory regulations, this would be a recipe for regulatory standstill.

Safeguarding regulatory Flexibility

In addition, Kinda Mohamadieh, Senior Researcher at Third World Network, explained the continuous concerns of Global South countries in respect of the protection of regulatory autonomy. The “Right to Regulate” should not only just pay lip service; it is more relevant than ever, not only for Global South countries but also for countries of the Global North: the climate crisis, the increasing economic importance of services and the dynamic development of new services in the course of digitalisation confront decision-makers with big challenges and demand full regulatory flexibility. Furthermore, Mohamadieh described a new, very problematic development within the WTO: individual groups of countries would leave the joint negotiation framework as soon as the concern is voiced that the “Right to Regulate” was ignored. Such an approach would undermine the bases of multilateral cooperation and was in urgent need of change.

Further information:

AK Wien & EPSU Study: Trading away public policy space? Assessing the risk of enhanced domestic regulation disciplines in trade and investment agreements for public interest regulation   
All material on EPSU-AK EUROPA-ÖGB Europabüro Webinar “Public interest at the crossroads”
AK EUROPA: No trade in public services