Down to Earth begins a series of previews of the Fifth WTO Ministerial Conference 2003 in Cancun, Mexico
a crucial decision confronts the forthcoming Fifth World Trade Organization (wto) Ministerial Conference in Cancun, Mexico, in September 2003: whether or not to launch negotiations on a possible multilateral framework on investment. Issues such as the very need for this type of an arrangement under the wto, and the pro-investor tilt in proposals put forward by the North will also have to be dealt with simultaneously.
The wto's Working Group on the Relationship between Trade and Investment (wgti) is currently undertaking "exploratory and analytical work" in order to assess the scope for such a framework.
At this stage, however, it seems unlikely that a consensus can be evolved between now and Cancun. "The wgti discussions are completely incoherent. On every issue that has been put on the table so far, there is so much divergence," asserts Nagesh Kumar, director general of Research and Information System for the Non-Aligned and Other Developing Countries. The organisation analyses development policy and international negotiations.
On its part, the eu -- the key proponent of such a framework within the wto -- has been raising the stakes. In February 2003, it presented a paper to the wto's highest decision-making body, the General Council, claiming that the Singapore issues are in a state of "clarification" until the Cancun ministerial. It contended that negotiations "will proceed" after the meet. It may be recalled that the four new issues that emerged at the Singapore ministerial in 1996 pertain to investment, competition policy, transparency in government procurement and trade facilitation.
The 2001 Doha mandate, in addition to seeking clarification on specific issues, states that any framework should "reflect in a balanced manner the interests of home and host countries". Further, "the special development, trade and financial needs of developing and least-developed countries should be taken into account as an integral part of any framework".
This is not reflected in the discussions within the wgti to date. On the contrary, there are indications that Japan, the eu and the us are focused almost exclusively on granting greater rights to multinational investors. As Martin Khor of the Third World Network, a Malaysia-based non-governmental organisation (ngo), puts it: "They (the rules) are not aimed at regulating investment but to regulate governments so that they can't regulate investments." Developing countries argue that such a pact will impede their ability to take decisions on what form of investment would be in accordance with their domestic interests and priorities.
A civil society declaration, signed initially by a more than 40 ngos from the North and South and released on March 21, calls for the explicit rejection of the launch of negotiations on investment and other Singapore issues in Cancun. The declaration also accuses the triad -- Japan, the us and the eu -- of attempting to "hold transnational investors above national decisions on development priorities, macroeconomic policy, environmental directives and implementation of international human rights laws and norms".
Many argue that the wto is not the right forum for global investment talks. The activists' declaration reiterates this view. Even Kumar, who believes that there is no need as such for a multilateral framework on investment (see box: Weak precedents), is of the same opinion: "If it is universally felt that there is a need for an international framework, it should be negotiated in an appropriate forum such as the United Nations (General Assembly) or the United Nations Convention on Trade and Development -- not the wto." T K Bhaumik, senior adviser (policy), Confederation of Indian Industry, feels that a plurilateral agreement with an 'opt-in, opt-out' provision between interested members under the wto framework would be more appropriate. "India should not be a stumbling block if such an arrangement were to be proposed," he adds.
Meanwhile, the eu's persistence raises fears that it could make the Singapore issues a bargaining chip. The current concern, therefore, is that in seeking greater commitments from the eu on agriculture and services, will the developing world compromise on investment and other Singapore issues in Cancun?
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