Nexus - 0504 - New Times Magazine-pages

Page Content (OCR)

Indonesia and Pakistan remain outspoken against even the small- est steps towards a global investment treaty.* The working group has been discussing trade, investment, development and economic growth on an abstract level, but in 1998 will also take on "multilateral agreements and initiatives". Its report to the WTO Ministerial Conference in May 1998 [as we go to press] is not likely to contain any controversial recommen- dations, and it is not expected that any decisions on investment will be taken at this meeting. Over the [northern] summer and fall, however, debates in the working group will heat up in anticipation of the December 1998 deadline for the final report to the WTO General Council. Proponents of a WTO treaty on investment will attempt to rally support for the preparation of negotiations; their success largely hinges upon the fate of the MAI negotiations. Observers expect that the EU and others aim to revitalise MIA so that negotiations could begin by 1999 or the year 2000. According to some sources, the most likely strategy is the initi- ation of a new general round of negotiations to include worldwide liberalisation of agriculture, investment and several other issues at the beginning of the new millennium. Indonesia and Pakistan remain outspoken against even the small- At the conclusion of their June 1996 meeting in Lyon, France, est steps towards a global investment treaty.* G7 leaders described the results of the Witrand conference as "a The working group has been discussing trade, investment, major milestone in the renewal of UNCTAD" and applauded the development and economic growth on an abstract level, but in refocusing of UNCTAD's work on "a small number of priorities 1998 will also take on "multilateral agreements and initiatives". to promote development through trade and investment, with the Its report to the WTO Ministerial Conference in May 1998 [as we _ aim of facilitating the integration of developing countries in the go to press] is not likely to contain any controversial recommen- international trade sys dations, and it is not expected that any decisions on investment Although consensus-building on investment rules within the will be taken at this meeting. UNCTAD is informal, developing countries didn't join without Over the [northern] summer and fall, however, debates in the nudges from their industrialised neighbours. As EU working group will heat up in anticipation of the December 1998 Commissioner Sir Leon Brittan put it in a speech to a business deadline for the final report to the WTO General Council. audience in Cologne: "Informal discussions have already begun Proponents of a WTO treaty on investment will attempt to rally in Geneva, largely thanks to European and Canadian pressure. support for the preparation of negotiations; their success largely We have been trying not to bludgeon developing countries into hinges upon the fate of the MAI negotiations. Observers expect submission, but to share with them the fruits of our latest analysis, that the EU and others aim to revitalise MIA so that negotiations in order to show that investment liberalisation is a winning strate- could begin by 1999 or the year 2000. gy for all players." According to some sources, the most likely strategy is the initi- And not only G7 governments are trying to lure developing ation of a new general round of negotiations to include worldwide countries into the UNCTAD massage parlour: major industry liberalisation of agriculture, investment and several other issues at lobby groups like the European Round Table of Industrialists the beginning of the new millennium. (ERT) and the International Chamber of Commerce (ICC) have also discovered the usefulness of this institution. WORLD TRADE ORGANIZATION In December 1997, the ERT and the UNCTAD Secretariat co- The World Trade Organization (WTO) came into being on 1 organised a high-level meeting of 25 Geneva-based ambassadors January 1995, following the signing from developing countries and some of the GATT global free trade agree- 16 CEOs of ERT companies to dis- ment in 1994. The WTO's mandate cuss a June 1997 ERT working paper is to remove obstacles to trade, and on investment. This meeting was governments can ask its dispute set- A chaired by the UNCTAD Secretary- tlement body to investigate whether The IMF s crowbar is a set of General, Rubens Ricupero, and ICC another country's legislation might in investment liberalisation and ERT Chairman Helmut Maucher fact be a trade barrier. WTO deci- . . of Nestlé. Maria Livanos Cattaui, sions are binding and can be measures which rob countries of Secretary-General of the ICC, was enforced through the implementation their economic sovereignty. also present. And at UNCTAD's 1996 World Investment Forum Conference, the ICC spoke on behalf of world busi- The most recent WTO judgement ness, outlining what Third World that a consumer protection law acted countries should do to attract foreign as a trade barrier concerns the European Union's ban on growth direct investment. Asking investors to fulfil special obligations, ormones in beef, but many more cases are on the way. Just as for example, was strongly discouraged.** the US raises cases on behalf of its corporations, the EU questions US food safety and environmental legislation on behalf of INTERNATIONAL MONETARY FUND of trade sanctions against the disobe- dient government by all WTO mem- er countries. Europe-based TNCs. The International Monetary Fund (IMF), traditionally responsi- The US, the EU and Japan are continuously seeking the expan- ble for helping countries meet their balance-of-payments require- sion of the WTO's mandate, as their industries crave access to the ments and setting currency standards, has been a key instrument ast remaining unprotected sectors of Third World economies. in prying open markets for foreign investors and bailing them out Since 1995, steps have been taken to liberalise telecommunica- in the case of financial crisis. The IMF's crowbar is a set of tions and financial services. investment liberalisation measures which rob countries of their Despite fierce Third World opposition, a WTO investment lib- economic sovereignty. eralisation treaty is still a high priority for OECD countries and, in As James Tobin, the Nobel laureate economist who proposed a articular, for the European Union. tax on all international currency transactions, put it: "It is hard to that tha aru INTERNATIONAL MONETARY FUND The International Monetary Fund (IMF), traditionally responsi- ble for helping countries meet their balance-of-payments require- ments and setting currency standards, has been a key instrument in prying open markets for foreign investors and bailing them out in the case of financial crisis. The IMF's crowbar is a set of investment liberalisation measures which rob countries of their economic sovereignty. As James Tobin, the Nobel laureate economist who proposed a tax on all international currency transactions, put it: "It is hard to escape the conclusion that the countries’ currency distress is serv- ing as the opportunity for an unrelated agenda—including the obtaining of trade concessions for US corporations and expansion of investment possibilities."*” And indeed, the recent IMF "recovery packages" for the shat- tered economies of South Korea, Thailand and Indonesia included a number of provisions that might have been taken straight from the text of the MAI. These included requirements that the indebt- ed governments guarantee the following: the right for all foreign investors to establish investments in every sector of the economy; the weakening of labour and environmental standards to attract UNCTAD The United Nations Conference on Trade And Development (UNCTAD) is increasingly used by OECD countries and business groupings as a forum for moving Third World countries in the direction of a friendlier position on investment deregulation. The UNCTAD, at its May 1996 conference in Witrand, South Africa, received a mandate to study the development implications of existing investment arrangements, like bilateral investment treaties (BITs), and to discuss the necessity of a multilateral framework for investment. 28 - NEXUS JUNE - JULY 1998 The IMF's crowbar is a set of investment liberalisation their economic sovereignty.