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Browsing by Author "Otala, Sofia"

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  • Otala, Sofia (2014)
    Water is not only one of the international community’s most puzzling issues but also one of the most controversial areas of international trade. At present, over 1.1 billion people lack access to clean water and over 2.4 billion people lack access to proper sanitation. Due to their fundamental nature, water services have traditionally been thought of as public services. During recent decades, however, many countries have adopted policies that enable private sector participation in the supply of water services. Consequently, water services are nowadays a major field of international trade, and they are covered by the framework of the General Agreement on Trade in Services (GATS). By using the legal dogmatic method, this study aims to provide a review of the issues that arise in the interrelationship between the rigid provisions of the GATS and domestic water service policies. In special focus are the consequences of unsuccessful privatization and the possibilities for World Trade Organization (WTO) Members to adjust their water policies according to their domestic preferences and standards. Some critics argue that the fundamental nature of water services is incompatible with the rationale of trade liberalization. This thesis aims to establish that GATS provisions can be interpreted so as to acknowledge the specific nature of water services. The thesis is divided into four chapters. The first chapter discusses firstly the scope of application of the GATS and whether water services could be exempted from the scope of the GATS pursuant to Art. I:3(b)(c). Secondly, the first chapter elaborates the current classification of water services under the WTO. To date, it is unclear whether and to what extent water services are classified under the WTO. Initiatives to change the current classification under the WTO have been made in the past negotiation rounds, but due to the sensitive nature of these services, the negotiations have so far ended with no results. The second chapter focuses on Arts. XVI (market access) and XVII (national treatment). This chapter aims firstly to analyze the interrelationship between market access obligations and domestic water policies. In special focus are numerical limitations on foreign service suppliers and how such limitations ought to be assessed in a natural monopoly market. Secondly, it discusses how domestic water policies may violate a Member’s national treatment obligations under Art. XVII. It is suggested that the current assessment of likeness is not compatible with the nature of water services, and that legitimate policy objectives should be taken into consideration in the likeness analysis. The third chapter discusses the possibilities to justify trade-restrictive water policies pursuant to Art. XIV. Light is also shed on the status of the human right to water and sanitation, and its importance in the justification of GATS-inconsistent measures. The justification of water policies is discussed particularly with respect to paragraphs (a) and (b) of Art. XIV. In light of the existing case law, the thesis discusses whether measures concerning the supply of water services are likely to fulfill the requirements set by Art. XIV. Finally, the thesis links water services to a broader societal context. The contradiction between respecting the right of WTO Members to introduce domestic regulation on services and the objective of progressive liberalization of services trade is discussed with special focus on the potential of Art. VI of the GATS. Furthermore, the thesis underlines the significance of water services in relation to development. It is submitted that developing countries should be reserved an emphasized leeway to determine their domestic policies in order to best promote their development. It is not yet clear where the GATS draws the line between its stated objectives. This thesis argues that the right balance between economic and non-economic interests would eventually both abolish unnecessary barriers to trade and promote the fulfillment of the human right to water and sanitation.