What GATS is and why we need to fight it - Public services under threat

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the General Agreement on Trade in Services (GATS) is not primarily a trade agreement but a mechanism for entrenching the power of multinational capital over democratically accountable public services. Its central thesis is that GATS functions as a legal crowbar to prise open every remaining public service — health, education, water, prisons — to profit-driven private provision, while simultaneously stripping governments of the legal capacity to defend the public interest. The WTO is presented not as a neutral arbiter of trade rules but as a court that always rules in favour of capital, operating through a managed consensus that excludes the vast majority of the world's population from meaningful participation. The argument is that this is not an accidental feature of the agreement but its deliberate purpose: to lock in neoliberal restructuring at the international level, beyond the reach of electoral politics or popular protest.

Theoretical Grounding

The analysis draws on a classical Marxist understanding of the state under capitalism, particularly the insight that the state apparatus, even when nominally democratic, ultimately serves the interests of the ruling class. The article does not deploy the language of the tendency of the rate of profit to fall or overaccumulation, but its argument is implicitly grounded in the logic of capital's drive to commodify ever more spheres of social reproduction. The expansion of capital into public services represents a response to the crisis of profitability in the traditional industrial sector — a search for new fields of accumulation. The concept of "externality" is used effectively to expose the gap between capitalist accounting and social costs, a distinction that Marx's analysis of the contradiction between private appropriation and social production illuminates directly. The article sits within the Marxist tradition's critique of bourgeois democracy and international institutions, extending Lenin's analysis of imperialism as the monopoly stage of capitalism to the specific mechanisms of the WTO. It also draws on the Trotskyist tradition's insistence that the working class cannot rely on reformist governments to defend its interests, as demonstrated by the Labour government's active complicity in the GATS negotiations.

Conjunctural Relevance

The article was written in 2001, at the high tide of the anti-globalisation movement following the Seattle protests of 1999. The conjuncture is defined by the WTO's attempt to push through a new round of trade liberalisation in services after the failure of the Millennium Round, with the Doha Round launched in November 2001. The article names specific forces: the Coalition of Service Industries in the US, the European Services Forum, Trade Commissioner Pascal Lamy, Trade Minister Richard Caborn. It references concrete examples of privatisation's consequences — the Cochabamba water riots in Bolivia (2000), the Wackenhut prison scandals in New Mexico, the MTBE chemical additive case under NAFTA — to demonstrate that the abstract principles of GATS have lethal material effects. The article's relevance extends beyond its immediate moment: the logic it describes — the subordination of public provision to trade law — has only intensified with subsequent agreements such as the Trans-Pacific Partnership and the EU's attempts to push through similar provisions in bilateral trade deals. The COVID-19 pandemic dramatically illustrated the stakes, as governments found their capacity to control vaccine production and distribution constrained by intellectual property regimes embedded in WTO rules.

Where the Argument Continues

The article is a relatively early contribution to the IDOM corpus on trade agreements and public services. It leaves open several questions that later articles develop: the specific mechanisms by which the UK's Private Finance Initiative (PFI) connects to GATS liberalisation; the relationship between GATS and the EU's Services Directive (the Bolkestein Directive); and the strategic question of how trade union and social movements can effectively resist these agreements. Later IDOM articles on the Transatlantic Trade and Investment Partnership (TTIP) and the Comprehensive Economic and Trade Agreement (CETA) extend the same analytical framework to more recent trade deals. The article's brief reference to the "teamsters to turtles" coalition gestures toward the broader anti-globalisation movement, but does not develop a strategic assessment of its limitations — a gap filled by later Marxist analyses of the alter-globalisation movement's reformist illusions. The theoretical question of whether public services under capitalism can ever be genuinely "public" — or whether they are always, as the article implies, a terrain of class struggle — is implicit but not fully developed.

Connections

The article should be read alongside Naomi Klein's No Logo (1999) for the broader anti-corporate movement context, and alongside David Harvey's A Brief History of Neoliberalism (2005) for the theoretical framework of accumulation by dispossession. Within the Marxist tradition, it connects to Lenin's Imperialism, the Highest Stage of Capitalism on the internationalisation of capital, and to Ernest Mandel's Late Capitalism on the commodification of services. More recent IDOM articles on the WTO, the World Bank, and the IMF form a coherent corpus on the institutional architecture of global capitalism. The article's treatment of the state's role in public provision connects to the broader Marxist debate on the welfare state — particularly the distinction between reforms that strengthen working-class power and those that entrench capitalist logic, a distinction developed in Trotsky's The Transitional Program and later in the work of Tony Cliff on the "safety valve" function of welfare.

Key Quotes

1. "GATS is not really about trade at all. It's about overruling the state whenever it responds to its citizens' protests about looting and pillage by big capital."

2. "The government is not allowed to take measures which are in the public interest. It is not a defence before the GATS tribunal. And a Labour minister has participated in this and agreed to it all in the backroom negotiations."

3. "The legal tests under consideration would outlaw the use of non-market mechanisms such as cross-subsidisation, universal risk pooling, solidarity and public accountability in the design, funding and delivery of public services as being anti-competitive and restrictive to trade."

4. "The GATS Secretariat proposes that 'it may well be politically more acceptable for countries to accept international obligations which give primacy to economic efficiency.' And you'll be in trouble with them if you don't. So it's a race to the bottom."

5. "A recent study by Allyson Pollock of University College London painstakingly proved what we have argued here — privatised public services cost more and deliver less. The privateers walk off with public assets and lumber us with public debt. It's all about profit."

6. "The WTO is the body charged with regulating world trade. Its supporters, such as Clare Short, claim it is a 'rules-based organisation'. Otherwise, they say, we would have the domination of strong nations over the weak. Actually the WTO is the forum in which the strong nations exercise their domination over the weak."