This traditional “public domain” of the water sector has been challenged on the basis of a resurgence of neo-liberal market ideologies. Today many politicians and commentators are convinced that the supply of water through private companies can bring about much needed solutions for the pressing needs in the water sector. During recent years, policies encouraging private (often foreign) investment in water services and privatisation (including outsourcing and public-private partnerships) became the means of choice in many parts of the world. Public or communal schemes of water supply came under pressure in favour of supply schemes requiring competitive water markets. The emergence of multinational companies specialising in water supply and privatisation and commercialisation policies reinforced this development and created a veritable international market for water services.
While many of these policy shifts were based on autonomous national decisions, international economic and financial institutions such as the World Bank also advocated a greater involvement of the private sector. Arguably, the re-definition of the role of public and private entities in the water sector is also reinforced through developments in the World Trade Organization (WTO) and its General Agreement on Trade in Services (GATS). As part of the overall Doha Agenda, WTO members are currently engaged in negotiations to further liberalize trade in services (GATS 2000 negotiations). After the initial request and initial offer phases in June 2002 and March 2003 respectively, the day-to-day negotiations now take place in bilateral settings and the outcome will probably only become public at the end of the Doha Round scheduled for 2005. Based on a general negotiating proposal and country-specific requests by the European Community (EC), these negotiations now also cover water services.
In this paper we address some of the questions arising at the interface between services trade liberalization and water regulation. We begin by placing these questions into a human rights context arguing that access to water is a basic human right. The human rights character of access to water leads us to general questions about the relationship between human rights and international trade law. These questions received much academic and political attention in recent years. In this paper we add a further dimension to this relationship. Building upon the perspective of human rights and trade liberalisation as suggested in the 2002 report of the United Nations High Commissioner for Human Rights, we call for an approach to international trade law in deference to national regulatory autonomy. The second part of the paper adopts this approach and applies it to an analysis of key GATS provisions and their impacts on water regulation.