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The impact of international trade negotiations on water resources management and water services provision

Congress: 2008
Author(s): Anton Earle

Keyword(s): international trade, negotiations, water resources management, water services provision
Abstract Water is an indispensable resource for many economic activities such as agriculture, forestry, mining, power generation and tourism. Furthermore, the universal provision of clean water and sanitation services to households is a fundamental objective of governments. Due to the impact of globalisation the impact of international trade negotiations on water resources management and water service provisions becomes increasingly relevant. A thorough understanding of the linkages between trade and water policies is therefore vital. Due to the “give and take” nature of trade negotiations, favourable conditions for specific industries resulting from a specific set of negotiations will usually lead to less favourable conditions for other industries. Therefore decisions have to be made on which economic sectors are to be promoted as part of a country’s international trade strategy. These decisions can have a direct impact on the availability and quality of water resources and vice versa. The alignment between a country’s trade strategies with its water resource management policies, including the requirement of promoting Integrated Water Resources Management (IWRM), therefore needs to be facilitated. GATS regulates trade in services trade in services and provides, through its “Mode 3” (commercial presence - a foreign company setting up subsidiaries or branches to provide services in another country), a potential vehicle for access of foreign water service companies to other countries’ markets. Issues related to market access for foreign companies, investment, cost recovery or supply guarantees to poor and rural communities can have direct impacts on developing countries’ social development policies, such as meeting the Millennium Development Goals (MDGs). Any commitments relating to the market access in the water services sector therefore have to be made against this background. There is a need to ensure that water sector issues are understood and appropriately represented in trade negotiation strategies and that the water sector is adequately informed and can respond, with understanding, to developments in the various trade negotiation forums. Since it is imperative that this understanding is available prior and during negotiations, a certain “baseline” level of knowledge is needed, both in the water sector and in the other relevant economic sectors, about generic water-trade issues and processes. The paper will explore the linkages between international trade negotiations and water resources management and water services provision with specific reference to South Africa as a case example.
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