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Korea-EU FTA will force privatization of water supply and deterioration of public services


The European Union and the Korean government each made their final approval for the start of Korea-EU Free Trade Agreement (FTA) negotiations on 24th April and 1st May at the EU General Affairs and External Relations Council and the Foreign Affairs and Economy Ministers’ Meeting respectively. The first round of talks is scheduled to start on 7th May in Seoul.

The Korean government is venturing upon its FTA with the EU, despite that the Korean people are still very angered by the Korea-US FTA (KorUS FTA), which took away the life of Huh Se Wook and is bestrewed with lies and deception.

We oppose the Korea-EU FTA for various reasons.

First of all, the Korean government is manipulating public opinion with the same logic that FTAs will “bring about a prosperous future” used a year ago, when it started the KorUS FTA. One year ago, at the start of the KorUS FTA, allegations were raised that the government and related institutions had fabricated statistics and manipulated public opinion on the ‘positive’ effects of the FTA. What we witness one year later is series of evidence that the concluded KorUS FTA negotiations were completely in favour of US interests. However, the Korean government is about to start another important negotiation without any reflection nor responsibility for its past errors. Once again it is insisting, without any substantial evidence, that the Korea-EU FTA will foster the services industry which in turn will improve the lives of ordinary Korean people.

Secondly, the consecutive conclusion of KorUS FTA and Korea-EU FTA will have detrimental effects on the Korean society, particularly on public services. The KorUS FTA is symbolically labeled “NAFTA plus” because it is the most profound among the FTAs that US has concluded. Now European governments and corporations are calling for a FTA that is at least just as profound or more. In other words, due to the ‘most favoured nation (MFN)’ clause in all FTAs, negotiating governments and capital are competing with each other for a higher FTA, for more liberalization, commercialization and flexibilization of labour. In particular, the so-called ‘future MFN’ clause of the KorUS FTA will bring detrimental results. Should public services be more liberalized through the Korea-EU FTA, public services will have to be opened to US capital as well. For example, if water supply, which was exempt from commitments during KorUS FTA, is included in the Korea-EU FTA, it will in turn have to be bound to the KorUS FTA as well.

Thirdly, the Korea-EU FTA will force privatization of water - our life itself. Already the government, relevant research institutions and business circles are saying that EU is very much interested in services, while Korean capital is looking forward to another opportunity to promote another wave of restructuring. Public services such as education, healthcare, electricity, gas and water supply are likely to be included in this process. In particular, because most of top 10 water transnational corporations are European, even the government has acknowledged that water supply can be liberalized through the Korea-EU FTA. The problem is that the Korean government does not seem to have any will to negotiate otherwise.

Already the government has revised the Water Law several times in order to allow private capital to participate in waterworks, which is at the moment operated by municipal governments. Out of the 164 municipal waterworks around the nation, 9 have been commissioned to Korea Water Resources Corporation (KOWACO), 33 have signed basic agreements, while Incheon City has signed a MOU with a transnational corporation, Veolia. Furthermore, the government is pushing forth its ‘Plan to Foster the Water Industry’, which identifies water not as a public service but as a commodity and market, and is scheduling relevant legislation during latter half of this year. Concluding the Korea-EU FTA under these conditions, whereby national laws and institutions are being revised to allow participation of private capital in waterworks, will only force privatization and commodification of water. Regulations that protect waterworks as public entities are expected be attacked by the various clauses in the FTA, such as national treatment, competition rules, investor-state dispute settlement to name a few. Water will become target of profiteering for transnational capital.

Water is our life itself. The catastrophe that water privatization will entail is beyond our imagination. Cases such as Bolivia where water rates soared 10 20 times, South Africa where water was cut off for millions and 300 died of cholera, and Philippines where cholera also spread and water service limited to 4 hours a day for ordinary households are now well known to us. Already water rates are getting higher, while ‘water polarization’ between urban and rural areas is becoming more serious. Local governments are paying immense amount of money to companies as operation fees, and waterwork workers are facing job insecurity. Promoting the ‘Plan to Foster the Water Industry’ and negotiating the Korea-EU FTA under these circumstances will only bring nationwide disaster.

The Korea-EU FTA negotiations will soon start. We reaffirm that the concluded KorUS FTA is void, and strongly demand that the government immediately reconsider its plan to start negotiations with EU. We also call on the government to stop all attempts to privatize water including the ‘Plan to Foster the Water Industry’ as well as commissioning of waterworks to the private sector, and to come up with alternatives that are more public and environmentally friendly.

30th April, 2007

Joint Action against Water Privatization, South Korea

(Standing Chair of Executive Committee:
Lee Mal Sug, Vice President, Korean Government Employees’ Union)