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Providing cheaper access to water for poorer segments of the population by
employing tax money for water pipes would then be prohibited as a “discriminatory
measure” by the international treaty, unless it is granted to the same extent to
European suppliers: Brazilian taxpayers' money as a “subsidy” for a basic human
necessity: Access to water, would then have to be granted to the transnational corporations
as well.
In general the primacy of the international trade and investment regime rules
over national legislation and controls regarding the allocation of public goods like
water supply. Howard Mann from International Institute for Sustainable Development
(IISD) argues the following with respect to the impact of international trade and investment
regimes on the water sector:
“While a state will not lose jurisdiction in a strict legal sense over its water due
to trade or investment regimes, two things are clear: First, there is a significant
risk that the existing agreements place very strong limits on how that jurisdiction
can be exercised, and in whose interests it must be exercised. Second,
ongoing negotiations on trade and investment, including in the services sector,
may place even greater restrictions on the ability of governments to manage
water resources and services. These agreements can therefor have significant
impacts on local and regional water management decisions. And on traditional
users of water resources. [...]
[T]rade law generally does not, today, mandate the privatization of public services.
(The role of international banks and aid is not discussed here.) However,
if contracts and extant laws and regulations do not explicitly recognize and
give priority to the rights and needs of local citizens, or are not sufficient to
ensure long-term water quality management, the existing international trade
and investment rules will reinforce any weaknesses and imbalances by ensuring
the investor’s rights can be enforced under international law, and outside
of national legal systems. This makes subsequent changes in contract terms
and local or national laws more difficult, and potentially too costly to undertake.
The net result can be a locking-in of a weak and ineffective local water
management practices and regimes, at the expense of local users and to the
benefit of foreign investors, traders or other outside stakeholders.” 314
Nonetheless, the European Commission poses demands on developing countries
like Brazil to liberalize their market for drinking water and to subject it to international
trade and investment regimes. This led national parliaments in Europe, e.g.,
the German Bundestag in its Entschließung 15/1317 vom 1.Juli 2003 (Decision 15/
1317 from July 1, 2003) in demands N°19 und N°20, to decide to exert influence on
314 Mann, Howard: Who owns “your” water? Reclaiming water as a public good under international trade and
investment law, IISD, August 2003, p. 3.