Reader Dan, 4th Post on Water Issues

WTO GATS, FTAA, CAFTA, WORLD BANK, IADP

Reader Dan continues.

WTO GATS 2000 agreements are being implemented or pending that are defining water markets as we speak. Any service can be made into a commodity, not only water. Public Citizen presents this:

At one time, trade rules were designed to enhance trade in goods and therefore focused on the lowering of tariff and quotas. But today’s “trade” agreements also seek to encourage international competition in a vast range of service sectors. The new trade agreements encompass “everything that you cannot drop on your foot,” and include banking, telecommunications, postal services, tourism, transportation, waste disposal, oil and gas production and electricity. They also cover those services universally considered to be essential to human health and development, like healthcare, education and drinking water.
In many countries, citizen access to essential services as well as a fundamental function of government is to ensure and protect this access. Traditionally, this has meant that governments have provided the services themselves. While we often don’t think of essential services as primarily profit-making operations, many essential services such as health care and schools have proved highly profitable when privatized and freed from public interest regulation. For corporations, health care and education represent a combined $5.5 trillion market worldwide, and the new trade agreements like the WTO General Agreement on Trade in Services (GATS) and the proposed Free Trade Agreement of the Americas (FTAA) would increase their access to that market, without building in protections for consumers, workers or the environment.

Rules of the markets include the following:

1) There are only a few major companies and they are international in scope. This affects the goals of the suppliers as distinct from people who actually drink the water.
2) The agreements can open any national, state, or local government regulations to being overruled by appeal to a WTO tribunal. It can also pre-determine the playing field by impeding domestic company advantage of being close to the source of supply.
3) Lending organizations offer loans with harsh stipulations. IMF, World Bank, and IADP and here are lending with well-defined market objectives in mind that pre-determine how privatization is done in relation to international versus domestic companies.
4) Any regulation government or private for quality is put in the hands of the WTO tribunal. Hence the public regulatory mechanism for common good can be bypassed. It strikes me that a domestic company can be overruled as well, if you posit a conscientious supplier who drinks the water and wants regulation. Can you advertise that X company sells water that is dangerous?
5) Costs are to be charged in a pay-go manner instead of longer term financing that might be public or private that string out the initial costs over time. Prices are dramatically affected with one or the other. Full cost recovery affects public health negatively.
6) To date investment costs have not been to improve infrastructure, but more to maintain markets, implement management efficiencies, and increase profit margins at a cost to the consumer that appears to be short term, thus avoiding capitalization costs to improve the system.
7) It is possible that who gets to choose the design and engineering consultants work under WTO control, with not even the national government as a partner.

This defining of markets, occurring in supposed secret with access tending to be by leaks, seeks to define markets in a very non-competitive way, and to lessen any risk taking to minimum. There are provisions that a company can raise prices solely due to devaluation of the national currency, without regard to actual on the ground expense.

Where is the invisible hand? This does look like an invincible hand that is hard to think of as free in a good old fashion American way. And what about national sovereignty? All this stuff seems to turn things upside down in our own talk of markets, national interest, and the like.

Where do I throw my bricks when accountability questions arise?

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Dan’s Third Post on Water

Dan’s Second Post on Water

Dan’s First Post on Water