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Journal Article

The General Agreement on Trade and Services and Poor People’s Right to Water

Published on 1 January 2004

During the Uruguay Round the scope of multilateral negotiations under the auspices of the World Trade Organization (WTO) was extended to include trade in services. The outcome was the General Agreement on Trade in Services (GATS), which was established on 1 January 1995.

Since 2000, negotiations on the liberalisation of services have been ongoing under the auspices of this agreement. Also known as GATS 2000, these negotiations were initiated in order to strengthen the GATS framework and enhance world trade in services. The result is that WTO member countries are currently negotiating the liberalisation of a wide range of services from education to tourism to rubbish collection and environmental services, which hitherto largely fell under the jurisdiction of state control.

Since the conclusion of the GATS and the launch of GATS 2000, the agreement has come under severe attack by a high-profile worldwide campaign mobilised by organisations such as the World Development Movement and Focus on the Global South in both the North and the South. These organisations and many others have accused the WTO of displaying a severe democratic deficit in the way its agenda has been hijacked by corporate interests, thus having a detrimental impact on the lives and livelihoods of the poor in developing countries. GATS 2000 is seen to be a “frontal attack on the fundamental social rights” enshrined in several UN declarations and accompanying charters and covenants, in particular due to its potential to promote the commodification of life-giving resources such as water and apply market-based mechanisms on sensitive sectors such as health and education. The critics have also raised concerns regarding developing country governments’ ability to utilise policy mechanisms that can regulate services in such a way as to achieve universal delivery of basic services and safeguard the interests of poor people.

This article investigates the controversies and processes surrounding efforts to liberalise domestic water-related services under the auspices of the WTO/GATS, with a particular emphasis on the implications for poor people’s right to water. It demonstrates that while liberalising water-related services under the GATS may not necessarily undermine, dejure, the ability of member-states to introduce the kind of legislative measures that are necessary to safeguard the interests of the poor, there are a number of reasons to think that, defacto, the exercise of policy autonomy might be substantially curtailed. These constraints on the capacity of member-states to protect the poor stem from (a) inherent ambiguities in treaty interpretation; (b) and the politics of process arising out of power asymmetries and a lack of transparency in processes of negotiation and policy review. These and other factors can potentially lead to conflicting aims and contradictory outcomes around issues of trade, water provision, equity and rights.

The analysis of the GATS and water provision highlights the increasing role of the WTO in defining domestic policy agendas in developing countries in areas that have a direct impact on the poor. The effectiveness with which developing countries can define and negotiate in support of their interests when confronted with the agendas of developed countries and their global service providers will have a substantial impact on the livelihoods of the poorest people in developing countries.

It is important, however, to bear in mind that the analysis presented here is inherently speculative due to the ongoing nature of the negotiations and due to the fact that domestic water service delivery is not officially one of the sectors covered by the GATS. No country has so far liberalised its domestic water services under the auspices of the GATS. However, 41 countries have recently offered commitments on wastewater treatment and it is now widely acknowledged that the European Commission (EC) is interested in including water service delivery in the definition of environmental services under GATS, which would clearly serve the interests of European water companies. Thus, the debate around water privatisation, the GATS and poor people’s access to water is clearly already a controversial one that warrants discursive, conceptual and empirical analysis. The analysis is conducted both conceptually and empirically on the basis of desk-based research of the growing literature on WTO/GATS negotiations, NGO statements and the general literature on water privatisation experiences and it is complemented by semi-structured interviews with negotiators, campaigners, journalists and bureaucrats

The debates around the GATS and its impact on poor people’s access to basic services such as water, are closely related to debates around the nature of water. The article therefore begins by examining the case for the human right to water and the implications that a rights-based view of water has for the provision of water services. It then goes on to explore existing water privatisation experiences and their impact on poor people’s access to water. After looking at the controversies around the GATS in more detail, the article then draws on the discussion of existing non-GATS privatisation experiences and their impact on poor people’s access to water to investigate whether GATS provisions could undermine a government’s freedom to regulate in a manner consistent with equity and social considerations. The article concludes by arguing that such safeguard provisions would exist in an ideal world. However, in practice the politics of process, ambiguity and power at the multilateral and bilateral levels leave many doubts regarding poor people’s rights to basic services under GATS.

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This article comes from the IDS Bulletin 35.1 (2004) The General Agreement on Trade in Services (GATS) and Poor People’s Right to Water

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Mehta, L. and Madsen, B., l., C. (2004) The General Agreement on Trade in Services (GATS) and Poor People's Right to Water. IDS Bulletin 35(1): 92-102

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Authors

Image of Lyla Mehta
Lyla Mehta

Professorial Fellow

Birgit la Cour Madsen

Publication details

published by
IDS
authors
Mehta, L and La Cour Madsen, B
journal
IDS Bulletin, volume 35, issue 1
doi
10.1111/j.1759-5436.2004.tb00112.x

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