By Gustavo Capdevila
GENEVA, Apr 17 2002 (IPS)

The European Union (EU) denied that it seeks to privatise all public services, including water, as stated in confidential documents attributed to the bloc that were distributed this week by non-governmental organisations (NGOs).

Internal EU documents, leaked by the NGOs, contain the petition for privatisation that the EU is to present in the negotiations under way at the World Trade Organisation (WTO), say activists.

Sources from the WTO and EU denied – though with different levels of emphasis – the possibility of such privatisations.

Mike Moore, WTO director-general, said it was “simply untrue” that the organisation’s General Agreement on Trade in Services (GATS) would “somehow require developing countries to privatise public services, including water supply.”

Anthony Gooch, spokesman for the European Commission’s trade division stated, “We do not intend requesting that public services be done away with.”

On the contrary, the EU “believes that WTO members have the right to preserve their services,” said Gooch on behalf of the bloc’s executive body.

But NGOs reacted with alarm when the leaked EU documents were disseminated, containing the demands the 15-member European bloc allegedly is preparing to present to the 27 countries engaged in negotiations on trade in services.

The intent of the EU reportedly entails privatising all postal, financial and banking services, the generation and supply of electricity, tourism and telecommunications as well.

According to activist Clare Joy, a leader of the London-based World Development Movement, “the EU is also specifically demanding the elimination of laws allowing developing countries to regulate foreign investment.”

The European representative of Friends of the Earth, Alexandra Wandel, says “the broad range of liberalisation efforts could pose serious threats to people and the environment.”

The opening of trade markets in the service sector began in 1995 with the implementation of the accords reached during the Uruguay Round of multilateral trade talks (1986-1994), which also gave rise to the WTO itself.

Services constitute the economic sector that has expanded most in the last 15 years, reaching total trade of 1.2 trillion dollars annually, or a quarter of all global trade.

But the liberalisation of services has progressed most in areas like finance that especially favour the United States, observed former World Bank chief economist and Nobel laureate in Economics, Joseph Stiglitz, a U.S. national.

In contrast, the markets remain closed for trade in services like construction, sea transport and unskilled workforce movement. The liberalisation of these areas would benefit developing countries.

The services negotiations unfolding at the WTO, in Geneva, have advanced more than the talks on agriculture, in spite of being launched simultaneously in 2000.

The countries participating in the negotiations have until June to present their petitions for liberalisation of specific service markets and activities.

The leaked documents represent the basis of discussion about the proposals the EU will present in June, according to the NGOs.

Some of the European objectives refer to eliminating rules that prohibit the acquisition of land for exclusively speculative ends, as in the case of Malaysia.

They also seek to roll back the existing laws in Egypt that regulate the number of hotels and bank branch offices, determined by the needs of the local economy.

The EU documents mention overturning rules existing in countries like Argentina, Chile and Mexico that prevent foreigners from acquiring lands at a certain distance from the coast or borders.

But the issue that has caused an outcry from the NGOs has been the inclusion in those texts of proposals for privatising the supply and distribution of water.

The humanitarian organisation Oxfam International criticises the distortions of the multilateral trade system and says “there are legitimate fears” when it comes to the potential role of the WTO in the world’s water supplies.

“The WTO Secretariat insists that nothing in the agreement, as currently drafted, would allow for its use as a vehicle for deregulating water markets,” said Oxfam.

“However, there is equally nothing that excludes (the agreement’s) application to water,” stated the Britain-based group.

According to Oxfam, the EU has clearly called for “water for human use” to be included in the liberalisation timeline, and this is due to the fact that European companies dominate the global markets in that sector.

Two of these companies are Vivendi and Ondeo (formerly Suez Lyonnaise des Eaux), each of which provides water to more than 100 million households.

The two water giants aim to open new markets in developing countries, including Colombia, Uruguay and Venezuela, which have yet to fully liberalise their markets, says the humanitarian group.

The institutions that disseminated the EU documents are calling for a broad debate on the liberalisation of services markets.

For this reason, says World Development Movement activist Joy, “we must have a moratorium on the current GATS negotiations until a thorough assessment of the potential impacts has been conducted.”

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