Free Trade Myths Behind Push for WTO Investment Agreement Exposed

Jun 23

http://www.foe.co.uk/resource/press_releases/free_trade_myths_behind_pu.... [2]

A new report, published today (Mon), exposes the arguments for a
new free trade agreement on foreign investment at the World Trade
Organisation as groundless myths. The report [1], jointly
produced by Friends of the Earth and the World Development
Movement, comes just days before thousands of people around the
country lobby their MP [2] to oppose the UK Government's backing
for launching such an agreement at the next WTO Ministerial,
scheduled to take place in Cancun, Mexico, in September.

The European Union has been the driving force behind calls for an
investment agreement through the WTO, with the European Commission
claiming this will bring development benefits to recipient
countries. But analysis shows that an investment agreement will
primarily benefit large multinational companies, who will gain
greater `rights to roam' in the global economy.

The report explodes thirteen myths used by supporters of the
agreement, including:

Myth: an investment agreement will lead to an increase in foreign
investment in developing countries.

Myth: developing countries are keen to liberalise their
economies.

Myth: increased foreign investment increases economic growth and
development.

Myth: the WTO gives developing countries the power to shape an
investment agreement for their benefit.

Myth: an investment agreement at the WTO will mean an end to the
explosion of bi-lateral investment agreements.

Friends of the Earth and WDM, both members of the Trade Justice
Movement, are calling plans for new free trade agreements at the
WTO to be ditched and for international and national corporate
accountability legislation for businesses outside the WTO to
ensure that strict standards are applied to companies operating
overseas and that communities have rights to challenge bad
practice under the UN.

Friends of the Earth Policy and Campaigns Director Liana Stupples
said:

"Corporate lobbyists and our Government want to spin proposals for
a WTO investment agreement into a pot of honey for the developing
world. But nothing could be further from the truth. Without
binding rules for multinational corporations under the UN, the
developing world will have everything to lose and big companies
will have everything to gain. This WTO agreement must not be
allowed to go through."

WDM Head of Policy, Peter Hardstaff said:

The EU and the corporate lobby have conjured up a set of myths and
fantasies to give a spurious development justification to
launching an agreement that is entirely in their own interests.
The facts show that there is no evidence that a WTO investment
agreement will lead to even one dollar more being invested in poor
countries. We must have international trade rules with the aim of
development based [Author ID1: at Thu Jun 19 11:53:00 2003 ]on
evidence and fact not ideology and self interest. If the UK
Government is serious about making trade work for the world's
poor, they must push the EU to drop its backing for an investment
agreement. This would help developing countries, most of which
have little capacity to negotiate an over-loaded trade agenda. The
focus must be reviewing and reforming the existing unfair and
unbalanced WTO rules.

ENDS

Notes:

[1] Investment and the WTO - Busting the Myths is available below

[2] See www.tradejusticemovement.org [3]">1]

[3] Developing countries have consistently opposed launching new
free trade agreements at the WTO a position they have held since
before the 3rd WTO Ministerial meeting in Seattle in 1999. At the
last WTO ministerial held in Doha in November 2001 developing
countries, lead by India, held out against massive pressure from
the EU. They succeeded in getting a decision to launch
negotiation delayed until this years ministerial meeting. Their
opposition was most recently restated by trade ministers from the
Least Developed Countries meeting in Dhaka, Bangladesh on 2 June
2003.

.. [1] http://www.tradejusticemovement.org [3]
$$

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