Fears over opening up public services

By MATHEW DEARNALEY

The Government is being urged to match an Australian promise to come clean over new concessions due to be determined today to expose service industries to global free trade.

Today is the deadline for New Zealand and 144 other World Trade Organisation members to make initial offers of greater access to overseas firms in the second round of the General Agreement on Trade in Services, or Gats.

Australian Trade Minister Mark Vaile, while vowing not to allow foreign firms to buy into public health, public education or water systems, promised last week to reveal his country's offers on commercial parts of the services sector once they are tabled in Geneva.

He admitted acting in response to what he called considerable community interest.

Although New Zealand's Government has made similar pledges to protect public services, a spokeswoman for Trade Minister Jim Sutton said it would be up to the Cabinet when it meets today to decide whether to disclose its hand ahead of negotiations due to last until 2005.

Free-trade sceptics such as the Council of Trade Unions, the Green Party and some local bodies, including the North Shore and Waitakere city councils, are furious at having been allowed just 25 days to respond to a Government consultation paper.

They are asking the Government to delay making offers and let people know just what may be up for grabs in activities from education to transport and communications, and financial and environmental services.

Greens co-leader Rod Donald said New Zealand trade negotiators had a poor record of offering concessions such as cutting manufacturing tariffs, at a cost of thousands of jobs, without ensuring the country would gain reciprocal benefits.

"It's like turning up to a strip poker party in your underpants."

Prime Minister Helen Clark has said the Government will not offer up "things that we consider intrinsic to the New Zealand way of doing things", so will not give up public health and education.

Mr Sutton's spokeswoman said the Government had also stated clearly that it would make no commitments to opening up water supplies or other local authority services to overseas firms.

Local Government NZ spokesman Michael Reid said Government officials had assured his organisation that councils will not lose their ability to prefer local suppliers for economic development purposes when letting contracts.

But Mr Donald said the previous National Government made huge concessions in the 1994 Gats round which, without public debate, opened private education to foreign firms and outlawed compulsory local-content broadcasting quotas.

He was concerned that pressure may come on New Zealand's negotiators behind closed doors to surrender access to services such as early childhood education or give away the country's right to regulate foreign investment by abolishing the Overseas Investment Commission.

This is because the first of 10 guiding principles issued by the Government for preparing its initial offers says New Zealand will be guided "by the overriding objective of securing tangible overall benefit".

Sceptics see this as a sign the Government may again trade off services in hope of gaining greater access to world markets for farmers.

Auckland University law professor Jane Kelsey said she had seen leaked documents disclosing that New Zealand was asking the European Commission to drop a reservation allowing its members to maintain state monopolies including public education, a move which could see reciprocal demands.