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During the last decade, significant changes in policy have been made in respect to how water is managed and how it is supplied to consumers. These changes have resulted in institutional and legislative reforms, and a range of policy initiatives and instruments. However, developing international trade law that is compatible with the ability of countries to adopt strong domestic water policies is problematic. Specifically, there are concerns about how international trade rules covering services may constrain domestic regulations protecting and conserving water, wetlands and eco-systems.
While there has been considerable analysis of the consequences that the General Agreement on Trade in Services (GATS) may have for water service provision, particularly with reference to the privatization of water services, far less attention has been paid to the interaction between the GATS and domestic water laws insofar as they relate to resource management and environmental protection.
This paper highlights areas where potential for conflict between GATS disciplines and domestic policies to protect and conserve water, wetlands and ecosystems is emerging, and presents a series of policy recommendations that can address these challenges and help ensure that the GATS does not negatively affect water services by limiting regulatory flexibility and “locking-in” WTO Members to regulatory commitments that might ultimately be detrimental. Because GATS commitments are difficult to amend, policy makers and trade negotiators should begin work immediately, prior to, or in parallel with, agreeing to new rules or accepting new commitments in the current negotiations.