gats_5sep03-eb0b728e533f10a3.pdf

The paper argues that while GATS does not explicitly mandate privatization, its market access and national treatment obligations can indirectly encourage it and limit a government's capacity to implement universal service obligations (USOs) and subsidies. By analyzing environmental services commitments from the US, Estonia, the EC, and Nordic/Swiss countries, the authors demonstrate how specific 'carve-outs' and conditions in schedules can preserve regulatory flexibility. The document highlights the particular risk to developing countries, where privatization is often driven by international financial institutions, potentially locking them into GATS commitments that hinder the fulfillment of the human right to water.

• The GATS may indirectly encourage privatization through specific obligations, such as Article XVI, which prohibits limits on foreign ownership or the requirement of specific legal entities like joint ventures, effectively ruling out regulations that mandate public ownership.
• GATS commitments are characterized by an effective irreversibility, creating a 'lock-in' effect where governments may be unable to rescind privatization levels even if they were only experimental.
• Water services are frequently natural monopolies due to the high cost of infrastructure (pipe systems), which makes the GATS market access provision problematic as economic conditions, rather than government regulation, limit the number of suppliers.
• There is legal ambiguity regarding whether GATS allows governments to define monopoly boundaries based on social or economic needs rather than strictly following administrative or political lines.
• To preserve regulatory space, some WTO Members use specific conditions in their schedules: the US and Estonia limit commitments to services 'contracted by private industry', while Nordic/Swiss schedules exclude 'public works function' regardless of whether they are contracted out.
• The European Communities (EC) approach uses a 'self-defining' interpretation by reserving the right to define which services are 'public utilities', granting flexibility to alter these definitions based on social priorities.
• The GATS could hinder the implementation of Universal Service Obligations (USOs) and subsidies, as requirements for private providers to service unprofitable areas might be viewed as discriminatory under national treatment rules if they primarily affect foreign entrants.
• Developing countries are particularly vulnerable because their shifts toward private sector involvement are often mandated by the World Bank or International Monetary Fund (IMF) rather than autonomous policy choices, potentially broadening their GATS commitments inadvertently.

APA

Center for International Environmental Law (2003). gats_5sep03-eb0b728e533f10a3.pdf. https://www.ciel.org/wp-content/uploads/2015/03/GATS_5Sep03.pdf

Chicago

Center for International Environmental Law. gats_5sep03-eb0b728e533f10a3.pdf. 2003. https://www.ciel.org/wp-content/uploads/2015/03/GATS_5Sep03.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=gats_5sep03-eb0b728e533f10a3.pdf |date=August 2003 |url=https://www.ciel.org/wp-content/uploads/2015/03/GATS_5Sep03.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2003gats5sep03eb0b728e533f10a3pdf, author = {{Center for International Environmental Law}}, title = {{gats\_5sep03-eb0b728e533f10a3.pdf}}, institution = {Center for International Environmental Law}, year = {2003}, month = aug, url = {https://www.ciel.org/wp-content/uploads/2015/03/GATS_5Sep03.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }