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25th Sep 2022

EU pressures developing countries for access to water services

NGOs and multi-national water utilities companies have drawn a line in the sand against the EU and the international services lobby’s efforts to pressure developing countries into opening their water distribution markets.

If the EU gets its way, in exchange for access to the water markets, developing and Least Developed Countries (LDCs) would receive long sought-after access to Western markets as part of the WTO Doha Development Round.

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  • A lot of politics surrounds water access (Photo: EUobserver)

"We are negotiating for better opportunities for EU industry", Anders Jennsen of DG Trade said Tuesday (15 March) at a symposium on foreign participation in water markets as part of the General Agreement on Trade and Services (GATS) negotiations under way in the WTO.

It is unclear why the EU is pushing hard for market access especially as utilities present at the debate as well as the services industry lobby say they are not asking for access.

"We think it is in their own interest to do it", said Mr Jennsen pointing out that many developing countries already allow foreign participation in their water delivery services sector but they do not want it bound by an international agreement.

Agreeing to the EU's request would give stability for companies looking to become involved in developing markets, said Mr Jennsen. "It is a guarantee against sudden policy reversals", he said.

Unlikely coalition

But his views were countered by an unlikely combination of development NGOs and multi-national water utilities already operating in the developing world, saying that giving access to foreign companies bound by a multilateral agreement would not help developing countries.

"I don’t think opening up developing countries’ water services under GATS will achieve what needs to be done", to help poor regions gain access to drinking water, said Richard Aylard, head of corporate development and external affairs for RWE Thames Water, the German-owned utility that serves the London area.

"When we were analysing the agreement, we couldn’t find any real benefits for companies or developing countries. Water is a local issue but trade negotiations are handled by national governments. There is often a disconnect between the national level and local needs and applications", said Mr Aylard.

Development NGOs agreed with the view posed by Thames Water.

"It will not increase opportunities for development but will reduce development initiative on a national level", said Ziaul Hoque Mukta of ActionAid Bangladesh.

Roughly 5% of the world’s water is run by the private sector but 95% of that is by European companies.

Speaking on behalf of the WTO, Pierre Latrille said that although the EU had first opened the discussion on foreign participation in water distribution in developing countries three years ago, no country had made a commitment on what the EU had asked for.

Threat

But a thinly veiled threat lay among the remarks by the EU and services lobby.

Without the support of the EU’s proposal by developing countries, long sought-after concessions for agricultural market access for those countries into the Western world may not come.

"We can’t pressure Brazil or India into something they don’t want to do", said Mr Jennsen, but he later said, "What (the LDCs) are prepared to offer will need to be relative to what they are asking from us".

An underlying theme of Tuesday’s discussion was the EU’s unfair ability to manipulate developing countries, who fear losing trade concessions, developing countries into giving market access.

"If a government is dependent on aid from a government it is negotiating with, it’s not a level playing field", Ed Brown from Loughborough University in the UK said.

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