Although activists and developing countries stopped the Millennium Round of negotiations at the World Trade Organization (WTO) meeting in Seattle, negotiations on services and agriculture are going on right now.

The goal of bringing services into the WTO is to pursue "progressive liberalization." This means moving toward privatization of all services, including public services. It also means deregulation of services at the local, state and national levels and subjecting them to the WTO’s global rules for the benefit of transnational corporations (TNCs).

The General Agreement on Trade in Services (GATS), first adopted in 1994, includes a commitment to negotiate further liberalization starting in 2000.

Now the European negotiators want to include drinking water in the GATS agreement. The Europeans have large TNC’s like Suez Lyonnaise des Eaux which is involved in privatizing municipal water services around the world, including the city of Indianapolis, so it is in their interest to have water be part of the GATS.

The United States’ negotiators are figuring out how to respond. They know there is controversy in the U.S. about having GATS cover water. U.S. corporations would like limited coverage in areas where they are competitive with the European corporations. Advocates for environment and justice don’t want water covered in GATS. The U.S. is looking for a compromise position. They are willing to propose that GATS "carve out," i.e., exclude, transportation of bulk water across international borders by private companies. (Operation of pipelines is a service.) This would be good from the perspective of citizens and organization who believe water is a RIGHT not a need to be supplied by the market for profit.

But the U.S. is considering a more compromised position on water services within a country such as water treatment, distribution, and sewage treatment. They have suggested limiting the application of GATS in the U.S. to commercial applications. It appears that U.S. corporations want to include commercial applications of water because they think they can compete in some specific commercial applications like water purification for a building, but are not so concerned about serving the municipal markets at this time. This reflects the fact that U.S. players are not doing so well with cities like Indianapolis which used the French company Suez Lyonnaise des Eaux when they privatized their water treatment a couple of years ago.

Encouraging global market competition in supplying the commercial sector could lead to less water being available for public uses like public drinking water and wildlife protection. This is already a major problem due to agribusiness and industrial uses of water. The impact on the cost of water is also a concern. If big commercial users get water from private sources, public water supplies will have to carry more of the public infrastructure costs, leading to higher rates. This is a form of cream skimming.

For a crash course on water privatization, read "Blue Gold" by Maude Barlow. Available from International Forum on Globalization 415-229-9350 or e-mail ifg@ifg.org

A packet of organizing materials on water is available from the Alliance for Democracy. Contact Ruth Caplan 202-244-0561 or e-mail rcaplan@igc.org