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EU-GATS Study (EC-PREP)

Considerable debate has arisen around the prospect of developing countries committing to the application of rules under the General Agreement on Trade in Services (GATS) to water services. Views tend to be polarised around a pro-trade ‘ versus' pro-development axis. A key question is whether ‘ pro-trade' and 'pro-development', and specifically ‘pro-poor, objectives of policy in relation to water supply and sanitation (WSS) are consistent and coherent? If pro-trade and pro-development objectives are to be compatible and convergent in relation to WSS, it must be possible at a national level to liberalise the market according to GATS principles and to regulate so as to secure (poor) citizens' access. But is that actually the case? And do GATS procedures and rules allow for flexibility?

There has been little detailed empirical study of how the GATS-development relationship operates in practice, and the water sector provides a topical example with which to consider the relationship between the above twin goals. ODI has recently undertaken studies (a collaboration between ODI's Water Policy Programme and International Economic Development Group) in Mexico, South Africa and Senegal where existing markets in urban areas offer opportunity for analysis of ‘live' examples of services liberalisation in the water sector.The studies ‘mapped' the trade-development interface and showed how the inclusion of water services under GATS might affect the achievement of development goals, particularly for developing countries.

Staff

Peter Newborne, Tom Slaymaker