- The Washington Times - Friday, April 26, 2002

The European Union is demanding that foreign companies be allowed to compete with the U.S. Postal Service as part of World Trade Organization talks that began last year.
According to a draft copy of its demands obtained by The Washington Times, Europe also wants access to American markets for municipal water and waste services. It also will call for foreign companies to be given access to Small Business Administration loans.
The European demands, which will be formally presented to the U.S. government by the end of June, mark the opening salvo in WTO negotiations on trade in services, an area that includes industries from finance to telecommunications to energy. The talks began in earnest when the organization agreed at a November meeting in Doha, Qatar, to make a new attempt to remove barriers to international commerce.
Harry Freeman, a Washington-based analyst of trade negotiations, said the U.S. market is already open to foreign companies and that as a result demands by Europe and other trading partners are bound to be politically contentious here.
"What the European Union is going after is pretty predictable," Mr. Freeman said. "These are the clear bones of contention."
A European official, who asked not to be identified, said the document is "not final and official" but conceded that it gives a clear look at the demands the United States will hear from its trading partners in the new negotiations.
The Office of the U.S. Trade Representative, which will present a list of U.S. demands to Europe later this year, had no comment on the document.
Europe is renewing a long-standing demand that the United States allow foreign-owned ships to ferry lucrative cargo between U.S. ports, something that is prohibited by the Jones Act. The law requires these ships be built, owned and operated by Americans. A coalition of shippers, shipbuilders and maritime-state legislators has always frustrated efforts to change the law.
The suggestion that foreign companies be allowed to deliver U.S. letters seems certain to face equally tough opposition.
"We oppose this idea, as does the Postal Service and the other unions," said Sally Davidow, spokeswoman for the American Postal Workers Union.
World negotiations on services are governed by General Agreement on Trade in Services, created in the early 1990s. It lays down rules for regulating services that affect such agencies as the Securities and Exchange Commission, the Federal Communications Commission and state insurance regulators.
Also, countries must hash out among themselves promises to allow foreign companies to deliver mail or provide transportation services.
A relatively unknown pact when it was created, the services agreement has become the latest whipping boy for many critics of globalization. The same labor unions, environmental groups and other activists opposed to the WTO are making it the center of their campaign against the new negotiations.
Many of the groups, especially in the United States, say new negotiations will force cities to sell municipal utilities such as water and electricity and could put them in the hands of far-off corporations.
"Now the cat is out of the bag," said Ruth Caplan, who handles trade issues for the Alliance for Democracy, a group critical of the WTO. "From the mail we receive to the water we drink, the European requests show that our basic public services are under threat."
But business groups scoff at the notion that the WTO negotiations will destroy government monopolies.
"The foundation of the WTO is not discriminating against foreign companies," said Bill Reinsch, president of the National Foreign Trade Council. "If we don't let American companies do it, we don't have to let European ones in."

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