Nexus - 0504 - New Times Magazine-pages

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MAIGALOMANIA! THE MULTILATERAL AGREEMENT ON INVESTMENT MAIGALOMANIA! THE MULTILATERAL AGREEMENT ON INVESTMENT If ratified, the Multilateral Agreement on Investment will place yet more power and wealth in the hands of transnational corporations, with questionable benefits to people worldwide. hird World countries revolted against the MIA [the Multilateral Investment Agreement within the World Trade Organization] from the beginning. In January 1996, for example, Malaysian Prime Minister Dr Mahathir Mohamad commented that his country was "aware of such moves and...will take steps to ensure that such an unfair trade treaty will not be pushed through".“* Soon afterwards, eight Third World countries, including India and Indonesia, issued a statement declaring their "objection to the bringing up of the trade and investment issue in the World Trade Organization".” Couching their displeasure in diplomatic terms, these countries expressed their concern that an MIA would impact on "the ability of national governments to regulate FDI flows so as to support national development objectives and priorities". "Equally unclear", the eight governments stated, "is the nature of the potential benefits and costs of FDI and its relationship to the globalisation process and the accom- panying phenomenon of marginalisation".** Instead, they demanded that the investment issue be discussed within the framework of the UN Conference on Trade and Development (UNCTAD) which lacks binding juridical powers and in which developing countries are at a less glaring disadvantage as in the WTO. These resistant Third World countries had learned a lesson from the Uruguay Round of the GATT: that the initiation of negotiations generates enormous pressure for the completion of far-reaching treaties. Despite these clear signals from Third World governments, WTO Director-General Ruggiero nevertheless placed investment on the agenda for the WTO's December 1996 Ministerial Conference in Singapore. The EU and other proponents of the MIA had by that time adapted their proposal into a "study process" on the relations between trade and investment.” During the course of the Singapore conference, those countries who resisted bringing investment onto the WTO agenda were one after another prodded to change their position. Some countries lobbied with some success to limit the scope of the working group. The last country to give in was India, which ultimately joined the last-ditch efforts to prevent the proposed working group from preparing the elements of an MIA negotiation process. In an utterly undemocratic procedure, a final draft declaration was negotiated by an informal group of 30 countries. It was presented to the conference plenary at the very last moment, accompanied by a plea from the chairman, Singapore's Yeo Cheow Tong, to countries to refrain from reopening discussions.* And so the WTO working group on trade and investment was born. Following the Singapore conference, EU Commissioner Brittan envisioned the door to Pa multilateral "framework of binding rules" on investment wide open. He declared: ",..on investment...we have at least put WTO on the map. Investment indeed seems to me to be the top priority for WTO in the years ahead."" Third World negotiators, on the other hand, emphasised that they had managed to stop negotiations on an MIA from being launched. India's Commerce Secretary Tejendra Kanna said: "We made it clear that no mandate can be given for a study of an MIA. This is not permissible even with the two-year period. If it ever comes to that stage, even then we will block it."* A Briefing by Corporate Europe Observatory (CEO) © February 1998 c/- Prinseneiland 329 1013 LP Amsterdam, The Netherlands Telephone/Fax: +31 30 2364422 E-mail: ceo@xs4all.nl Website: www.xs4all.nl/~ceo/ INVESTMENT WORKING GROUP NEGOTIATIONS The tension between OECD countries and MIA opponents was tangible at the three meetings of the working group in 1997, at which the OECD, UNCTAD, the World Bank, the IMF and other international institutions were observers. Whereas the EU has contin- ued to urge for the commencement of negotiations, countries like Malaysia, India, JUNE - JULY 1998 NEXUS - 27