Environmental Engineering Reference
In-Depth Information
National treatment
- NT prohibits discrimination against foreign suppliers, includ-
ing laws that change conditions of competition, even if they do not formally dis-
criminate. It covers committed sectors only (art. XVII).
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Market access
- MA prohibits various limits on service suppliers including quanti-
tative limits (monopolies, quotas, excusive suppliers, economic needs tests, number
of operations, volume of service, number of employees) and legal status of a sup-
plier. It covers committed sectors only (art. XVI).
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Negotiations on expanded coverage and trade rules
When the Uruguay Round of trade negotiations ended in 1994, the most controversial
GATS proposals were deferred for future negotiations. GATS includes a built-in agenda
for negotiations on sector commitments (art. XIX), new trade rules on domestic regula-
tion (art. VI), procurement (art. XIII), subsidies (Art. XV) and emergency safeguards
(Art. X). The negotiator for the USA is the US Trade Representative (USTR), whose sta
ff
is part of the Executive O
ce of the President.
Exceptions
GATS Article XIV excuses con
fl
ict with a trade rule if a measure is:
necessary to protect public morals;
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necessary to protect human or animal health;
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necessary to protect privacy or prevent fraud;
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necessary (in the view of each country) to safeguard essential security interests.
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GATS debates
GATS regulates government 'measures' such as laws and agency regulations if they a
ect
trade or investment. In most environmental sectors, government does not just regulate ser-
vices; it also owns or regulates investments and their external impact. The GATS debate
is about the power of government to pursue environmental objectives, to reverse a deci-
sion to privatize or deregulate, and to regulate at the subnational level.
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Environmental objectives
The WTO's agreement on trade in goods (GATT, the General Agreement on Tari
s and
Trade) has a general exception to preserve policy space to promote conservation of
exhaustible natural resources. GATS does not have this general exception, and its critics
warn that GATS could be used to challenge environmental measures that are beyond the
reach of GATT (Waskow, 2003). GATS defenders assert that environmental measures are
safeguarded by a footnote that excludes 'inputs' from an MA rule that prohibits limiting
'outputs' (e.g. limits on intake for water services) (GATS art. XVI(c)).
So will GATS trump a greener GATT? The test will come in a sector where GATS and
GATT overlap. This is where an environmental good (e.g. LNG) is delivered in a sector
where a country has a GATS commitment (e.g. bulk storage or distribution of fuels).
ff
Privatization and deregulation
GATS critics warn that the agreement pushes privatization and promotes back-door
deregulation (Sinclair, 2000; Sinclair and Greishaber-Otto, 2002). The WTO responds
