Free Trade Myths Behind Push For WTO Investment Agreement Exposed

Original Publication Date: 
22 June, 2003
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Investment > FREE TRADE MYTHS BEHIND PUSH FOR WTO INVESTMENT AGREEMENT EXPOSED

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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.html

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[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.

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