(EU) and the Common Market of the South (MERCOSUR)? - FDCL

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108 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.
the European Commission in order to take back the demands on developing nations to liberalize their water markets. The UN had appointed a special rapporteur for the right to drinking water and sanitation in 2001 and has adopted the “General Commentary No. 15” 315 on the right to water in December of 2002, according to which, e.g., the access to water cannot be cut due to unpaid water bills. 316 But still: The European Commission insists that everything should be subjected to the free play of the market, and the Commission knows very well, why it trusts in it: According to UNCTAD-numbers the services area firstly represents the “largest sector of the world economy” and secondly on a global basis approximately 90 percent is directed towards the respective domestic market, only around 10 percent is on a cross-border basis. 317 Therefore, from the perspective of transnational corporations the necessity and interest arises for a cross-border opening up of markets through FTAs, bilateral investment treaties and the WTO-negotiations (by means of GATS). The services sector accounts for more than 2/3 of the GDP within the European Union, and European services corporations are leading on a global basis, which is proudly emphasized by DG Trade on its website: “The services sector is the single most important economic activity in the EU accounting for over two thirds of GDP and employment. The EU is home to some of the world’s leading companies in many service sectors, such as the telecom, financial, business, and environmental services sectors.” 318 Therefore from the perspective of the European Commission it is just and equitable to demand from Brazil (whose position it is, within the framework of the sectoral services areas of GATS-2000, to implement small restrictions and conditions, like minimum requirements for local quotas, the protection of national services and public goods from the strong competition of the industrial nations or generally speaking national measures within national or regional development programs with special conditions for local suppliers) to simply: “Remove.” 315 http://www.menschen-recht-wasser.de/downloads/4_2_un_comment.pdf. 316 http://www.menschen-recht-wasser.de/menschenrecht-wasser/vereinte-nationen.php. 317 Base year 2001, in: United Nations Conference on Trade and Development (UNCTAD): FDI and Development: The Case of Privatization-related Services FDI: Trends, Impact and Policy Issues, TD/B/COM.2/EM.14/2, September 12, 2003, p. 3. 318 http://europa.eu.int/comm/trade/issues/sectoral/services/index_en.htm. 109
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Christian Russau Enforcement of int
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Preface Since the end of 1999 the C
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If the “Interregional Association
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8 Chapter 5: The enforcement of int
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10 1.1 Negotiations of the “Inter
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12 A similar agreement of the so-ca
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14 tute in the eyes of many countri
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16 amaraty, where the FTAA-negotiat
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18 free trade agreement between the
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20 at the UN Millenium Summit to ha
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22 on the possibility of a unilater
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24 tual contradictions between the
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26 fired. The workers union OGB-L,
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28 policy and EU development policy
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Chapter 2: Foreign direct investmen
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50% in 2002 as compared to the prev
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The reasons for propagating this co
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• according to a study conducted
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promotion of domestic demand, in or
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2.2 International Agreements and Tr
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2.3 The World Trade Organization WT
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• trade and investment • compet
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2.3.3 The GATS agreement The Genera
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which works on a profit-basis, sees
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“deadline: by 1 January 2005”.
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“discrimination” or “expropri
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Stockholm Chamber of Commerce (SCC)
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(EU) and the Common Market of the South (MERCOSUR)? - FDCL

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