OneWorld.net (U.S.)

SAN FRANCISCO, Dec 20 (OneWorld) - While trade justice advocates are declaring that the world's poorer countries were "betrayed" at pivotal trade talks that concluded in Hong Kong Sunday, negotiators managed to resist pressure from the European Union and others to open their public services--including water--to competition from private companies.

The international aid group Oxfam called the final agreement "profoundly disappointing" and "a betrayal of development promises by rich countries, whose interests have prevailed yet again."

The high-profile issue at last week's negotiations was agriculture, particularly the subsidies industrialized countries pay to their farmers that encourage overproduction.

In a process many call "dumping," the excess is often sold at below-market prices in developing countries, thus driving down prices and decreasing earnings for already impoverished farmers in those countries.

While the final trade agreement includes a pledge by industrialized countries to end export subsidies by 2013, it does not include any prohibition of domestic subsidies, which cause dumping, says Oxfam.

According to the group, export subsidies account for less than five percent of the European Union's overall agricultural support.

The Christian relief and development group Tearfund also called the final trade deal a "betrayal" of developing country interests, while Friends of the Earth, a global network of campaigning groups, said the agreement "fails the environment and the world's poorest."

But while agricultural issues grabbed most of the headlines, behind closed doors negotiations raged fiercely over issues some say have the potential the be even more salient, determining the fate of millions of people.

Perhaps most significantly, negotiations ended with continued resistance by developing countries to shift public services, like water and transportation, from public to private hands.

For years, industrialized countries, including the U.S. and those in the European Union, have pushed developing countries to open their public services to global competition from private companies. This year's WTO meeting was no different. Led by the EU, industrialized countries introduced an amendment to Annex C of the General Agreement on Trade in Services (GATS), which would have increased the number of services countries must agree to liberalize.

Under GATS, one of over 20 trade agreements governed by the World Trade Organization (WTO), all 148 WTO member countries must reduce trade barriers on services like communications, education, transportation, banking, and water.

Of the 163 services recognized by the WTO, the proposed amendment, which is expected to resurface in future talks, would have required 72 developing countries to open more than half to private corporations.

One of the most critical services that could be affected is water.

Globally, 90 percent of the world's water supplies are still controlled publicly, but as water increasingly becomes the most coveted finite resource of the 21st century, companies and financial institutions are scrambling to make water delivery and wastewater management private business.

A coalition of hundreds of grassroots activists formed in Hong Kong Friday to oppose the privatization of water services under GATS, or any other international trade agreement.

The coalition, made up of various groups including farmers and fisherfolk from across Asia, says that private control of water services would hurt millions of people worldwide because companies--unlike public institutions--put profits before the public good.

"They pollute, they don't conserve water--you cannot make money conserving the product you sell, obviously, so it's not in their interest to reclaim water, to set up good infrastructure," says Maude Barlowe, Director of the Council of Canadians, an NGO rallying against water privatization.

"In the end companies have to cut corners somewhere in order to make enough money for investors--there's just no other way. The public sector doesn't have to turn a profit and the private sector does. So in the end, somewhere, something's got to give, either the quality of the product or the safety of the water coming into people's homes or the ability of poor people to access it or all three," Barlowe said Thursday, in an interview in Hong Kong.

In dozens of locations around the world, including Bolivia and South Africa, water privatization has gone wrong, resulting in price increases, cut-offs, environmental disasters from sewage spills, poor maintenance of water systems, corruption, and broken contracts.

Under the proposed changes to GATS, developing countries that privatize their water system would have to open the bidding process to foreign-based--or "transnational"--corporations. Those nations that insist on a public water system would face punitive trade retaliations. The push for liberalization is backed heavily by some of the leading companies that provide water services, including two French firms, Vivendi Universal--now Veolia--and Suez, which provide over 70 percent of private water services globally.

Suez made a profit of EUR 1.8 billion in 2004 from water, and Veolia made EUR 125 million. The U.S. construction giant Bechtel is also an up-and-coming player in the water services industry. Big water corporations lobby in the WTO negotiations through such groups as the Global Water Partnership, the World Water Council, and the World Commission on Water.