Nexus - 0702 - New Times Magazine-pages

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The obvious beneficiaries of EU trade and investment policies Despite fierce opposition by Third World governments, a WTO are those European-based transnational corporations that have working group was set up to study the relations between trade and evolved into global players. Although corporations like Nestlé, investment. This followed an utterly undemocratic procedure Shell and Unilever have profited from transnational gianthood for _ involving only an informal group of 30 countries. The 'cold war' decades, with an established presence in over 100 countries between OECD countries and MAI/MIA opponents continued around the world, they are being joined by other ERT companies _ throughout the meetings of the working group in 1997 and 1998. like Ericsson, Saint Gobain and Pirelli. Large TNCs based in the Fearing that the EU would succeed in rallying support for the US, the EU and Japan dominate the emerging global economy— _ preparation of negotiations, the citizens’ groups that opposed the the top 500 companies, in particular, controlling over two-thirds MAT in the OECD insisted that it should not be revitalised within of world trade and more than a third of the world's total produc- the WTO. In this politically tense climate, the investment work- tive assets. Almost every sector of the global economy is under _ing group announced in its December 1998 final report that it the grip of a handful of TNCs, the most recent grabs being the ser- would not bring out any recommendation but, rather, would con- vices, automobile and pharmaceutical sectors. tinue discussions.“ Despite these developments, the European Despite the rhetoric of liberalisation being a 'win-win' scenario Commission's position has not significantly changed since 1995. for North and South, the EU's international trade policies effec- The EC remains a staunch proponent of investment negotiations tively continue to be guided by the ‘offensive interests’ of these in the WTO. corporate giants. There is no conspiracy involved, and the image The EC knows that investment negotiations within the WTO of helplessly weakened states blindly following the orders of will not result in a ‘big bang’ treaty like the MAI was intended to TNCs is incorrect. Certainly, economic globalisation has be. Rather, a WTO investment treaty would consist of a gradual increased the bargaining power of corporations and their lobby but continuous process of investment deregulation over the next groups, but this is itself the result of a set of policies promoted by few years. Underneath the new language of a 'development- governments. The corporate privileges in the World Trade friendly' investment agreement, the EC's primary goal is to get Organization system are therefore the predictable result of the binding rules on investment that ‘lock in' the deregulation that has neoliberal economic ideology which taken place over the last years and continues to dominate in governments which commits governments to around the world. rolling back gradually the remaining . barriers that ‘discriminate’ against THE MILLENNIUM-ROUND Large TNCs based in the US, TNCs. This is essentially as unde- OFFENSIVE the EU and Japan dominate the mocratic and dangerous as the OECD The European Commission, spurred . MAI. It is certainly a major threat to on by the very vocal Sir Leon Brittan, emerging global economy— citizens' groups in the South and has vigorously promoted the launch- the top 500 companies, in North who have witnessed the nega- tive social and environmental impacts of the deregulation wave of the last few years. These controver- sial changes, often imposed by the IMF through its structural adjustment programs, would become internation- al law, and new policies to create a ing of a broad new round of WTO . . nezotiations covering a wide range of particular, controlling over issues following the Seattle | __ two-thirds of world trade... Ministerial Conference (30 November to 3 December 1999). Apart from the issues in the WTO's ‘built-in agenda'—agriculture, intellectu- al property rights and services—the Commission has also pro- fair level playing field for local economic players and other posed the initiation of negotiations for agreements on investment, attempts to re-regulate would be banned. public procurement, competition policy and other areas. The Many Third World governments, NGOs and people's move- Commission seems slowly but surely to have gained the support ments oppose the introduction of not only investment into the of Canada and Japan; and the US, which had initially favoured WTO, but of other proposed new issues as well. Martin Khor, separate negotiations on a smaller number of issues, is finally director of the Third World Network, has pointed out that the warming up to the idea of a grand new round. EU's motive for a WTO agreement on competition policy is not to Southern governments, however, have not given Brittan's initia- limit corporate concentration on a global scale. On the contrary, tive an overly warm reception. In fact, their resistance to negotia- it hopes to dismantle barriers faced by Northern TNCs in 'emerg- tions on new issues—and particularly on investment—dates back ing markets’, such as various laws or policies that favour local to 1995 when an earlier EU offensive took place (see firms. These might include policies that give importation or dis- "MAIgalomania", CEO, 1998; reprinted in NEXUS 5/03, 5/04). tribution rights to local companies, for example. When the negotiations for a multilateral investment treaty (the On the issue of government procurement, the EU hopes to pre- MAI) officially began within the OECD in 1995, the involved vent Southern governments from giving preference to local citi- Northern countries had a two-track strategy, pushing simultane- zens or firms when distributing public sector contracts (such as ously for a Multilateral Investment Agreement (MIA) within the for building or equipping hospitals, schools, infrastructure, etc.). WTO. In fact, the EU hoped to launch talks on an MIA at the Bringing government procurement under the WTO regime with December 1996 WTO Ministerial Conference in Singapore. its ‘national treatment’ principle would mean that foreign corpora- Developing countries revolted against the MIA from the begin- tions must be given the same (or better) opportunities to win con- ning, however, afraid that it would impact "the ability of national tracts as locals. When foreign investors complain about discrimi- governments to regulate FDI flows so as to support national natory treatment in a WTO member state, they would be able to development objectives and priorities". Instead, they demanded bring the case to the WTO's dispute settlement system through the that the investment issue be discussed within the framework of intermediary of their own government and claim compensatory UNCTAD.” and retaliatory measures. Large TNCs based in the US, the EU and Japan dominate the emerging global economy— the top 500 companies, in particular, controlling over two-thirds of world trade... 22 - NEXUS FEBRUARY — MARCH 2000