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The EU and WTO/GATS negotiations on water services liberalisation

The key issue addressed by this study is how the EU’s position on private sector provision in developing countries and its objectives in the ongoing GATS negotiations relate to the aims of the EU Water Initiative to provide equitable access for the poor to water and sanitation services: that is, whether the GATS and ‘pro-poor’ objectives of EU development policy in the water sector are coherent and consistent.

The research will be carried out through a combination of desk-based research and case studies. It will address three broad themes reviewing:
• Whether the requests the EU has tabled to developing country trading partners for improved market access for European water suppliers are consistent with the pro-poor provision of water services envisaged by the EU’s Water Initiative.
• Options for private sector participation and their respective advantages in the provision of water and sanitation services, highlighting the role of governments in intervening and offsetting market failures and addressing social and environmental objectives, including assessment of the role of domestic regulation in host countries with a view to safeguarding the provision of water services for the poor.
• The critical issue of national and local governance of water and sanitation service provision, including the enfranchisement of consumers within a rapidly privatising environment, the promotion of choice between providers and services and the approaches taken to facilitate and broker equitable and effective public-private partnerships.

The research will consist of three main components in addressing these issues:
• Analysis of case study countries. This will examine the impact of private sector participation and the role of the GATS in the water sector for a number of developing countries and, in particular, the extent to which poorer groups have secured equitable access to water services as a result. Senegal could be a suitable African case study: SDE was privatised in the 1990s, and is now owned by Vivendi. Other potentially interesting countries for study could include South Africa, Argentina and Turkey.
• Analysis of GATS commitments in the water services sector. This will make a detailed assessment of GATS commitments in the sector made by WTO Members and examine requests and offers in the ongoing GATS 2000 negotiations.
• Implications of developing countries’ promotion of private sector participation in the provision of water services (sewage, sanitation, and water), including their liberalisation under the GATS and coherence with the EU Water Initiative. This will examine possible conflicts between equity and public service goals and efficiency and profit objectives.

Staff

Sheila Page, Ian Gillson (former ODI Research Fellow, now with the World Bank) and Sven Grimm (former ODI Research Fellow, now with DIE)