Water and the WTO: Don’t kill the messenger

Alexandre Le Vernoy and Patrick Messerlin ()
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Patrick Messerlin: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, GEM - Groupe d'économie mondiale - Sciences Po - Sciences Po

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Abstract: It is widely recognized that forecasting future climate shocks at a regional level̶which regions will be flooded, which ones will be under water stress on a year by year basis̶is largely out of reach. In such circumstances, trade gets back a role that has faded away during the last sixty years of relatively stable climatic, economic and political conditions. It is to be the ultimate insurer. Regions under sudden water stress will need to import food products in exceptional quantities, and trade happens to be a cheap (efficient) insurance scheme to face a sudden instability in water resources in some parts of the world. There are thus good reasons to look at whether the world trade regime could provide a strong and sound framework to the international water regime. Not many papers have looked at this issue. They generally see the WTO as a source of problems rather than of solutions. Hence, they argue for specific international agreements on water. But, the climate community experience of the COP15 (the 2009 Copenhagen Summit on Climate Change) is a strong warning signal showing how difficult it is to build a "specific" international regime. In contrast, this paper argues that the basic principles on which the world trade regime is built would be equally useful for the international water regime, and that the WTO rules are flexible enough to address the specific problems raised by water management in a international context. It also argues that, if current international trade mirrors domestic distortions, limiting such trade will cost a lot in terms of water use. Killing the messenger (trade) does not solve the problems (domestic markets).

Date: 2010-11-25
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03461720
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Published in ESF Strategic Workshop on Accounting for water scarcity and pollution in the rules of international trade, European Science Foundation, Nov 2010, Amsterdam, Netherlands

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Working Paper: Water and the WTO: Don’t kill the messenger (2010)
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