A number of experts came together in Geneva, Switzerland, on 3 March to identify and assess the interlinkages between freshwater and international trade law, with discussions ranging from geopolitical, trade and legal issues associated with transboundary exports of fresh water, to services and agriculture. Participants agreed that water was a unique good, possibly even “sacred,” due to the impossibility of finding substitutes, and commented that this feature heightened the sensitivity of action and called into question the role of bodies such as the WTO in the area.
Civil society groups have repeatedly raised concerns regarding the water-trade linkages, particularly in the context of negotiations on environmental services in the WTO. Most recently, they levelled their criticism at the EU for including certain water services in the liberalisation requests submitted to its trading partners.
Water exports - a ‘good’ under GATT?
Professor Edith Brown Weiss from the Georgetown University Law Centre noted that it was still unclear whether bulk water exports involving the public and/or the private sector qualified as a ‘good’ and were consequently covered by the WTO’s General Agreement on Tariffs and Trade (GATT). If the Agreement did apply, there was further uncertainty as to how it might impact the sector. She pointed out that the GATT could cover the various possible forms of water transfer, but that another interpretation would require that the resource must undergo some kind of change to become a product. One participant believed that the lack of clarity regarding the ownership of fresh water could complicate the application of the GATT further, or mean that the Agreement did not apply to this area at all. Brown Weiss stressed that regardless of the uncertainty that surrounded fresh water under the GATT, markets for this resource were already beginning to be established in different countries around the world.
Nathalie Bernasconi Osterwalder from the Center for International Environmental Law (CIEL) discussed the relationship between water and agriculture, and particularly focused on the environmental damage inadvertently caused by irrigation subsidies, such as excessive water use and cropland salinisation. She noted that while the WTO Agreement on Agriculture includes reduction(s) in both the developed and less developed world’s subsidies, these reductions could be spread out, and target specific areas or products. As such, the CIEL lawyer said this option of selectivity could become a problem if the overall objective is the decrease of irrigation subsidies.
The Workshop on Freshwater and International Trade Law was co-hosted by the Graduate Institute of International Studies, the Faculty of Law of the University of Geneva and Institute for International Economic Law at the Georgetown University Law Center.
Water services feature in EU’s services offer and requests
The European Commission has incorporated water for human use and wastewater management, including water collection, purification, and distribution services in several requests submitted to its trading partners in the context of the current round of trade negotiations. The Commission however, stressed that “this sub-sector only concerns the distribution of water through mains” and “excludes any cross-border transportation…and does not imply access to water resources.” Regarding further liberalisation of the EU’s own services sector, the European Commission proposed in its draft offer under the category ‘environmental services’ that “access to foreign providers of waste water, sanitation and similar services, who wish to establish in the European Union, is allowed” (most Member States already committed these services during the Uruguay Round).
Civil society groups have voiced strong opposition to the liberalisation of the water sector in general and have specifically pushed the EU to leave basic public services untouched. Friends of the Earth Europe expressed concern that sector liberalisation could strengthen the already dominant positions of certain European corporations, such as Suez, Vivendi, Thames Water/RWE and SAUR. The group, along with other environmental and development groups and trade unions around the world, called for the GATS negotiations to be suspended immediately to allow for assessment of the effects of liberalising trade in services, both in the North and the South and to make room for an open debate on the desirability of such liberalisation.
The groups are particularly concerned about the mandate adopted at the Fourth WTO Ministerial Conference in November 2001 to negotiate on the “reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services”. They fear that this mandate could open the door to the liberalisation of water services, which they regard as fundamental public services. “Everything from your town’s municipal drinking water to the local electricity utility to the US postman are headed for sale on some Geneva ‘trade’ negotiating table,” warned consumer group Public Citizen’s Lori Wallach.
Background: International Year of Fresh Water
The UN has proclaimed 2003 as the International Year of Freshwater and has encouraged governments, the UN system and all other actors to work to improve the awareness of management, protection, and sustainable use of freshwater. This week the UN has released a report on freshwater stating that we are “destroying ecosystems which play an essential role in filtering and assuring freshwater resources”. Koichiro Matsuura, Director-General of UNESCO warned, “if we fail to react (in dealing with the water crisis), this could jeopardise the future of these resources and with it, the quality of life, and even the survival, of future generations”. The report will be formally presented at the Third World Water Forum in Kyoto, Japan this month.
Additional Resources
For further information on GATS and the EU’s negotiating documents, see: http://www.gatswatch.org.
ICTSD Reporting; “About Water Year 2003,” UNESCO, 2003; “Summary of the Commission’s Proposal For the EU’s Services Offer,” EUROPEAN COMMISSION, July 2002; “UN: World Water Crisis Due to Leadership Inertia,” ENS, 5 March 2003; “Friends Of The Earth Europe Bulletin,” FoEE, March 2003.