Bates, Rebecca --- "The Trade in Water Services: How Does GATS Apply to the Water and Sanitation Services Sector?" [2009] SydLawRw 4; (2009) 31(1) Sydney Law Review 121
∗ Lecturer and PhD Candidate, Faculty of Law University of Sydney. I would like to thank Associate Professor Rosemary Lyster for her comments on the article. I am also grateful to Dr Brett Williams for his assistance with understanding the finer points of the GATS. An earlier version of this paper was presented at the 2007 University of Sydney Postgraduate Conference.
1 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (‘Marrakesh Agreement’), annex 1B (General Agreement on Trade in Services) 1869 UNTS 183 (entered into force 1 January 1995) (‘GATS’).
[2]World Trade Organisation (‘WTO’), GATS — Fact and Fiction <http://www.wto.org/english/tratop_e/serv_e/gatsfacts1004_e.pdf> accessed 1 November 2007.
[3]See, for example, Maude Barlow and Tony Clarke, Blue Gold: The Battle Against Corporate Theft of the World’s Water (2002); Marco C E J Bronckers, 'More Power to the WTO?' (2001) 4 Journal of International Economic Law 41; International Forum on Globalisation, Intrinsic Consequences of Economic Globalization on the Environment: Interim Report (2002); Riccardo Petrella, The Water Manifesto: Arguments for a World Water Contract (2001); Vandana Shiva, Water Wars: Privatisation, Pollution and Profit (2002).
[4]United Nations Conference on Trade and Development, Trade and Development Report: Overview (2004) at [1] <http://www.unctad.org/en/docs/tdr2004overview_en.pdf> accessed 5 November 2007; WTO, Free Trade Helps Reduce Poverty, Says New WTO Secretariat Study (2000) <http://www.wto.org/english/news_e/pres00_e/pr181_e.htm> accessed 12 November 2007.
[5]John H Jackson, ‘World Trade Rules and Environmental Policies: Congruence or Conflict?’ (1992) 49 Washington and Lee Law Review 1227 at 1230–33.
[6]General Agreement on Tariffs and Trade, opened for signature 30 October 1947, 55 UNTS 187 (entered into force provisionally 1 January 1948).
[7]Thomas J Schoenbaum, ‘International Trade and Environmental Protection’ in Patricia W Birnie and Alan E Boyle, International Law and the Environment (2nd ed, 2002) at 697.
[8]Aly K Abu-Akeel, ‘Definition of Trade in Services Under the GATS: Legal Implications’ (1999– 2000) 32 George Washington Journal of International Law and Economics 189 at 189.
[9]Mitsuo Matsushita, Thomas J Schoenbaum and Petros C Mavroidis, The World Trade Organization: Law, Practice, and Policy (2nd ed, 2006) at 1–3.
[10]David Hunter, James Salzman and Durwood Zaelke, International Environmental Law and Policy (2nd ed, 2002) at 1147; Matsushita, Schoenbaum and Mavroidis, above n9 at 3.
[11]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1A (General Agreement on Tariffs and Trade) 1867 UNTS 190, art I (entered into force 1 January 1995) (‘GATT’).
[12]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1A (‘GATT’) 1867 UNTS 190, art III (entered into force 1 January 1995).
[13]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1A (‘GATT’) 1867 UNTS 190, art XI (entered into force 1 January 1995).
[14]Matsushita, Schoenbaum and Mavroidis, above n9 at 234–41, 258–60.
[15]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995).
[16]Matsushita, Schoenbaum and Mavroidis, above n9 at 9; Philippe Sands, Principles of International Environmental Law (2nd ed, 2003) at 947–8.
[17]Sands, above n16 at 947.
[18]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C (Agreement on Trade-Related Aspects of Intellectual Property Rights) 1869 UNTS 299 (entered into force 1 January 1995).
[19]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 2 (Understanding on Rules and Procedures Governing the Settlement of Disputes) 1869 UNTS 401 (entered into force 1 January 1995); Sands, above n16 at 947–8.
[20]Philip Ruttley, Iain Macvay and Carol George, The WTO and International Trade Regulation (1998) at 35.
[21]Schoenbaum in Birnie and Boyle, above n7 at 704.
[22]Hunter, Salzman and Zaelke, above n10 at 1153.
[23]WTO, above n2 at 5; Hunter, Salzman and Zaelke, above n10 at 1151.
[24]Eric H Leroux, ‘Eleven Years of GATS Case Law: What Have We Learned?’ (2007) 10 Journal of International Economic Law 749 at 749–50.
[25]Ibid.
[26]The exclusion of a definition was the intention of the drafters: See Abu-Akeel, above n8 at 190–1.
[27]Ibid.
[28]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art I (entered into force 1 January 1995).
[29]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art I:3(b) (entered into force 1 January 1995). Article I:3(c) defines a service supplied in the exercise of government authority to be ‘any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers’.
[30]WTO, above n2 at 5.
[31]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, Preamble (entered into force 1 January 1995).
[32]Panagiotis Delimatsis, ‘Due Process and “Good” Regulation Embedded in the GATS — Disciplining Regulatory Behaviour in Services through Article VI of the GATS’ (2007) 10 Journal of International Economic Law 13 at 16–17.
[33]Ibid.
[34]WTO, above n2 at 1.
[35]Canada — Certain Measures Affecting the Automotive Industry, WTO Doc WT/DS139/R, WT/DS142/R (2000) (Report of the Panel); WTO Doc WT/DS139/AB/R, WT/DS142/AB/R, AB-2000-2 (2000) (Report of the Appellate Body).
[36]Matsushita, Schoenbaum and Mavroidis, above n9 at 619–20.
[37]Id at 620–1.
[38]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art II:2 (entered into force 1 January 1995).
[39]Matsushita, Schoenbaum and Mavroidis, above n9 at 623–6.
[40]Id at 648.
[41]Ibid.
[42]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art XVII:2 (entered into force 1 January 1995).
[43]Matsushita, Schoenbaum and Mavroidis, above n9 at 648–9.
[44]Id at 659–60. Article VI GATS (the Domestic Regulation provision) provides that in circumstances where a member has made a GATS commitment, the Member must apply regulations that may affect the trade in services ‘in a reasonable, objective and impartial manner’: Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art VI:1 (entered into force 1 January 1995).
[45]European Communities — Regime for the Importation, Sale and Distribution of Bananas, WTO Doc WT/DS27/R/USA (1997) (Report of the Panel); WTO DocWT/DS27/AB/R (1997) (Report of the Appellate Body) (‘EC — Bananas III’).
[46]Matsushita, Schoenbaum and Mavroidis, above n9 at 662.
[47]EC — Bananas III, WTO Doc WT/DS27/R/USA (1997) (Report of the Panel); WTO DocWT/DS27/AB/R (1997) (Report of the Appellate Body) in Matsushita, Schoenbaum and Mavroidis, above n9 at 662.
[48]Leroux, above n24 at 752.
[49]Hunter, Salzman and Zaelke, above n10 at 1151; Rosemary Lyster, ‘Assessing Australia's Ability to Regulate the Activities of Water Utilities in the Face of Free Trade Agreements’ (Australian Research Council Discovery Grant Application, 2005) at 11.
[50]WTO, above n2 at 6–9.
[51]North American Free Trade Agreement, 17 December 1992, 32 ILM 289 (entered into force 1 January 1994).
[52]See, for example, the Free Trade Area of the Americas: Third Draft Agreement, FTAA.TNC/w/133/Rev.3 (dated 21 November 2003).
[53]Australia-US Free Trade Agreement, 18 May 2004 [2005] ATS 1 (entered into force 1 January 2005).
[54]WTO, above n2 at 5.
[55]Goldman Sachs Global Investment Research, Introducing GS Sustain (2007); Matthew S Tisdale, ‘The Price of Thirst: The Trend Towards the Privatisation of Water and its Effect on Private Water Rights’ (2004) 37 Suffolk University Law Review 535 at 535.
[56]Goldman Sachs Global Investment Research, above n55 at 111.
[57]James Salzman, ‘Thirst: A Short History of Drinking Water’ (2006) 18 Yale Journal of Law and the Humanities 94.
[58]Jessica Budds and Gordon McGranahan, ‘Are the Debates on Water Privatization Missing the Point? Experiences from Africa, Asia and Latin America’ (2003) 15 Environment & Urbanization 87; Karen Bakker, ‘Liquid Assets: How We Provide Water Depends on Whether We View Water as a Commodity or as a Public Good’ (2003) 29 Alternatives Journal 17 at 17; Peter H Gleick, Gary Wolff, Elizabeth L Chalecki and Rachel Reyes, The New Economy of Water: The Risks and Benefits of Globalization and Privatization of Fresh Water: Final Report (2002).
[59]Budds and McGranahan, above n58 at 90–2.
[60]Ibid; Christopher Sheil, Water's Fall: Running the Risks with Economic Rationalism (2000) at 26–30.
[61]Nick Johnstone and Libby Wood (eds), Private Firms and Public Water: Realising Social and Environmental Objectives in Developing Countries (2001) at 7–10.
[62]Gleick, Wolff, Chalecki and Reyes, above n58 at iii–v.
[63]Shiva, above n3 at 24–5; Petrella, above n3 at 12–14; Budds and McGranahan, above n58 at 92–3.
[64]United Nations, International Decade for Action: Water for Life, 2005-2015: Factsheet on Water and Sanitation <http://www.un.org/waterforlifedecade/factsheet.html> accessed 7 November 2007.
[65]Jennifer Naegele, ‘What is Wrong with Full-Fledged Water Privatization?’ (2004) 6 Journal of Law and Social Challenges 99 at 100.
[66]Gleick, Wolff, Chalecki and Reyes, above n58 at 2–3.
[67]UNDP, UN Millennium Development Goals, UN-Habitat and Unicef, Mexico 2006: 4th World Water Forum: Water Supply and Sanitation for All (2006) at [91] <http://www.worldwaterforum4.org.mx/uploads/TBL_DOCS_80_11.pdf> accessed 20 April 2006.
[68]Budds and McGranahan, above n58 at 93.
[69]International Covenant on Economic, Social and Cultural Rights, opened for signature 16 December 1966, 999 UNTS 3 (entered into force 3 January 1976) (‘ICESCR’).
[70]Substantive Issues arising in the Implementation of the International Covenant on Economic, Social and Cultural Rights: General Comment No 15, UN ESCOR, 29th sess, UN Doc E/C.12/2002/11 (2002) (‘General Comment No 15’).
[71]Declaration on the Right to Development, GA Res 41/128, UN GAOR, 41st sess, 97th plen mtg, UN Doc A/Res/41/128 (1986); Peter Gleick, ‘The Human Right to Water’ (1999) 1 Water Policy 487 at 489, 493–4.
[72]Convention on the Elimination of All Forms of Discrimination Against Women, opened for signature 18 December 1979, 1249 UNTS 13 (entered into force 3 September 1981).
[73]General Comment No 15, UN ESCOR, 29th sess, [2] UN Doc E/C.12/2002/11 (2002).
[74]Gleick, above n71; Salman M A Salman and Siobhan McInerney-Lankford, The Human Right to Water: Legal and Policy Dimensions (2004) at 85–9.
[75]Shiva, above n3 at 87–105.
[76]WTO, The Third Ministerial Conference <http://www.wto.org/english/thewto_e/minist_e/min99_e/min99_e.htm> accessed 10 October 2007; Global Issues, WTO Protests in Seattle, 1999 (2001) <http://www.globalissues.org/TradeRelated/Seattle.asp> accessed 10 October 2007.
[77]United Nations Conference on Trade and Development, above n4.
[78]WTO, Understanding the WTO (2008) at [14] <http://www.wto.org/english/thewto_e/whatis_e/tif_e/understanding_e.pdf> accessed 10 October 2007.
[79]Hunter, Salzman and Zaelke, above n10 at 1127–29.
[80]WTO, above n2 at 2.
[81]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995).
[82]Hunter, Salzman and Zaelke, above n10 at 1129.
[83]Id at 1127–8.
[84]WTO, above n2 at 5.
[85]Hunter, Salzman and Zaelke, above n10 at 1131.
[86]The private water market is dominated by a small number of multinational firms including Suez Environment and Veolia Environment (previously Vivendi Environment): See Barlow and Clarke, above n3 at 101–53; Veolia Environment <http://www.veoliaenvironnement.com/en/> accessed 20 August 2008; Suez Environment <http://www.suez-environnement.com/> accessed 20 August 2008.
[87]Shiva, above n3 at 91.
[88]Additional rights may be provided to foreign corporations through the operation of agreements such as bilateral investment treaties: See Barlow and Clarke, above n3 at 176–80.
[89]See, for example, Erik J Woodhouse, ‘The “Guerra del Agua” and the Cochabamba Concession: Social Risk and Foreign Direct Investment in Public Infrastructure’ (2003) 39 Stanford Journal of International Law 295; Jeffery Rothfeder, Every Drop for Sale (2001).
[90]United Nations High Commissioner for Human Rights, Liberalization of Trade in Services and Human Rights: Report of the High Commissioner, UN Doc E/CN.4/Sub.2/2002/9 (2002).
[91]Andrew Lang, ‘The GATS and Regulatory Autonomy: A Case Study of Social Regulation of the Water Industry’ (2004) 7 Journal of International Economic Law 801 at 801–2.
[92]United Nations High Commissioner for Human Rights, above n90 at [50] in Lang, above n91 at 802.
[93]United Nations High Commissioner for Human Rights, Liberalization of Trade in Services and Human Rights: Report of the High Commissioner: Executive Summary, UN Doc E/CN.4/Sub.2/2002/9 (2002) at 4 in Lang, above n91 at 802; Lyster, above n49 at 7.
[94]Lang, above n91 at 806.
[95]Id at 806–12.
[96]Id at 807.
[97]Id at 836–7.
[98]Id at 810–12.
[99]Ibid.
[100]Leroux, above n24 at 750.
[101]Mexico — Measures Affecting Telecommunications Services, WTO Doc WT/DS204/R (2004) (Report of the Panel).
[102]United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WTO Doc WT/DS285/AB/R, AB-2005-1 (2005) (Report of the Appellate Body); WTO Doc WT/DS285/R (2004) (Report of the Panel) (‘US — Gambling’).
[103]Leroux, above n24 at 750; Delimatsis, above n32 at 13–14.
[104]Leroux, above n24 at 756; Delimatsis, above n32 at 14.
[105]Leroux, above n24 at 756.
[106]US — Gambling, WTO Doc WT/DS285/AB/R, AB-2005-1 (2005) [115-128] (Report of the Appellate Body); Leroux above n24 at 756.
[107]GATT Secretariat, Services Sectoral Classification List, GATT/WTO Doc MTN.GNS/W/120 (1991).
[108]GATT Secretariat, Scheduling of Initial Commitments in Trade in Services: Explanatory Note, GATT/WTO Doc MTN.GNS/W/164 (1993).
[109]Vienna Convention on the Law of Treaties, opened for signature 23 May 1969, 1155 UNTS 331 (entered into force 27 January 1980).
[110]Leroux, above n24 at 761–5; WTO, Dispute Settlement: Dispute DS285: United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services (2008) <http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds285_e.htm> accessed 3 September 2008, WTO, US-Gambling (DS285) < http://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds285sum_e.pdf accessed 3 September 2008.
[111]WTO, above n110.
[112]Ibid; Matsushita, Schoenbaum and Mavroidis, above n9 at 652.
[113]WTO, above n110.
[114]Ibid.
[115]Ibid.
[116]Ibid; Leroux, above n24 at 786.
[117]Article XIV(b) GATS provides an exception for measures ‘necessary to protect human, animal or plant life or health’: Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art XIV(b) (entered into force 1 January 1995).
[118]Leroux, above n24 at 766.
[119]Ibid.
[120]Ibid.
[121]US — Gambling, WTO Doc WT/DS285/AB/R, AB-2005-1 (2005) [250] (Report of the Appellate Body); Delimatsis, above n32 at 14.
[122]Delimatsis, above n32 at 14–15.
[123]See, for example, United States — Restrictions on Imports of Tuna, GATT Doc DS21/R (1991) (Report of the Panel) (‘Tuna/Dolphins I’); United States — Restrictions on Imports of Tuna, GATT Doc DS29/R (1994) (Report of the Panel) (‘Tuna/Dolphins II’); European Communities — Measures Concerning Meat and Meat Products (Hormones), WTO Doc WT/DS26/AB/R, WT/DS48/AB/R, AB-1997-4 (1998) (Report of the Appellate Body).
[124]WTO, above n2 at 9.
[125]Ibid.
[126]Id at 11.
[127]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art I:3(b) (entered into force 1 January 1995).
[128]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art I:3(c) (entered into force 1 January 1995).
[129]United Water International Pty Ltd is made up of Compagnie Générale des Eaux and Thames Water: Sheil, above n60 at 58.
[130]Id at 57–8.
[131]LexisNexis Butterworths, Halsbury’s Laws of Australia, vol 28 (at 8 August 2007) 440 Water, ‘2 Water Management’ [6005]; LexisNexis Butterworths, Halsbury’s Laws of Australia, vol 28 (at 8 August 2007) 440 Water, ‘4 Supply of Water’ [6030].
[132]Shiva, above n3 at 94–5.
[133]Id at 95.
[134]Lang, above n91 at 837–8.
[135]United States — Standards for Reformulated and Conventional Gasoline 35 ILM 603 (1996) in Hunter, Salzman and Zaelke, above n10 at 1167–8.
[136]Lang, above n91 at 832.
[137]Marrakesh Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1B (‘GATS’) 1869 UNTS 183, art XIV(a) (entered into force 1 January 1995); Matsushita, Schoenbaum and Mavroidis, above n9 at 638.
[138]Matsushita, Schoenbaum and Mavroidis, above n9 at 638.
[139]Id at 638–40.
[140]Evan Davis, ‘The Death of the WTO’s Doha Talks’ (25 July 2006) BBC News <http://news.bbc.co.uk/2/hi/business/5215318.stm> accessed 7 November 2007.
[141]International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171, art 6(1) (entered into force 23 March 1976); ICESCR, opened for signature 16 December 1966, 999 UNTS 3, art 11 (entered into force 3 January 1976); Universal Declaration of Human Rights, GA Res 217A (III), UN GAOR, 3rd sess, 183rd plen mtg, [71], art 25, UN Doc A/Res/217A (III) (1948).