WRITTEN QUESTION P-1250/03

by Herman Schmid (GUE/NGL) to the Commission

(26 March 2003)

Subject: GATS Liberalisation of drinking water

The EU produced a draft initial offer for improved market access to services on 6 February 2003. This request was sent to 109 countries, of which 94 are developing countries, in the framework of the General Agreement on Trade and Services (GATS).

According to the initial draft offer, the EU itself is not intending to liberalise drinking water under the GATS.

However, the actual content of the 109 requests reveals that countries like, for example, Bangladesh are asked to open up their markets for drinking water supply. The requests have been made public by the Canadian Polaris Institute (http://www.polarisinstitute.org/gats/main.htm).

How would the Commission explain that its public statements (see below) and the draft initial offer and actual request (which have been kept confidential from public scrutiny) send fundamentally different messages as to the intentions of the Commission in GATS?

The GATS negotiations are about opening up services trade. They are not about deregulation of services, many of which are closely regulated for very good reasons, such as ensuring quality and equal access to public services, social and territorial cohesion (Foreword by Trade Commissioner Pascal Lamy in the document which forms the basis for consultation with civil society).

Is the Commission aware that the opening up of the market for drinking water could violate the right to life in the UN Charter of Human Rights? How can the Commission guarantee that the right to life, will not be violated when people are deprived of equal access to water?

Finally, does the Commission consider the GATS agreement to have a higher legal status than the UN Charter of Human Rights?

Answer given by Mr Lamy on behalf of the Commission

(25 April 2003)

In the context of the World Trade Organisation (WTO)/General Agreement on Trade in Services (GATS) negotiations, the Community has tabled requests for improved market access for European services suppliers to its trading partners. Most of the requests, including to developing countries, do cover water distribution services together with waste water management.

The Community's requests are consistent with the Community's overall policy on water, and the Commission has made no secret of its objectives. The summary of the Community's requests, which the Commission published in July 2002, clearly states the Community is requesting market access for water collection, purification and distribution services.

Regarding access to water, it is important to stress that the Community requests on water distribution do not undermine or reduce in any way the host governments' ability to regulate that sector. Even if a government decides to open water distribution services to private sector participation, this does not mean that it cannot implement domestic policies targeted the achievement of social policy objectives.

In view of the high capital demand for water infrastructure investment, there is growing recognition that the private sector needs to be involved in efforts, together with government and civil society, to improve water and sanitation services in particular in poorer countries. Liberalisation of trade in water related services in the context of WTO could be used as an instrument to facilitate infrastructure investments, strengthen water management capabilities and foster technological development, taking into account developing countries' administrative capacities and regulatory framework.

Evidently, any reform of the water supply which involves private sector participation, including through possible GATS commitments in this sector, needs to pay particular attention to establishing an appropriate regulatory framework to ensure equitable access to water.

However, the Community requests in the GATS context do not undermine or reduce in any way the host governments' ability to regulate water management and allocation among users, to choose the more appropriate form of private participation and to impose equitable pricing policies and ensure affordability for the poor. The Community has and will continue to support developing countries in this respect, including through the provision of technical assistance.