Part 2 of 2 Trade -- a market fundamentalism<\/p>\n
Yanuar Nugroho, Director, Business Watch Indonesia, Surakarta,
\nyanuar-n@unisosdem.org<\/p>\n
There is series of issues called the \"Singapore Issues\" or
\n\"New Issues\" to be launched at Cancun, that consist of the issues
\nof investment policy, competition policy, transparency in
\ngovernment procurement and trade facilitation.<\/p>\n
Actually, investment policy will be the only new issue at
\nCancun. How important is this issue?<\/p>\n
Investment negotiations at Cancun, if allowed to succeed, will
\ncreate binding rules within the WTO on investments globally -- a
\nmultilateral investment framework (MIF). The concern of all those
\nthat are against negotiations on a MIF are that the outcome of
\nthe negotiations within the WTO would be unfair and against the
\ninterests of developing countries. Will developing countries go
\nfor that?<\/p>\n
Although there are reasons for developing countries to
\nmaintain the position of \"No to New Issues\", before these reasons
\nare listed it is important to note that, once negotiations begin,
\nit is difficult to back-roll the process. Thus, negotiations will
\nmost likely lead to an agreement. Once this agreement is reached
\nand signed by participating countries it is generally
\nirreversible, becomes binding to the signatories regardless of
\nthe government of the day, and becomes subject to the dispute
\nsettlement and sanctions procedures within the WTO.<\/p>\n
SEATINI put in its newsletter (July 2003) that most developing
\ncountries are not ready for an investment agreement and they
\nshould block the investment issue at Cancun, since there is a
\nneed for a full understanding of the development implications and
\nclarification of the many questions that are being asked.
\nInvestment is not a trade issue and should not be brought under
\nthe remit of a trade body such as the WTO. Developing countries
\nhave not fully analyzed the implications of a MIF for their
\neconomies and for their policy options.<\/p>\n
Nevertheless, the industrialized and the major developed
\ncountries are the advocates of a WTO investment agreement. At a
\nrecent meeting on June 10 and June 11 in Geneva of the WTO's
\nWorking Group on Trade and Investment (WGTI), the principal
\nmessage from the major developed countries was that negotiations
\non investment should be launched at Cancun.<\/p>\n
The argument for this position was that a WTO agreement on
\ninvestment could complement the existing networks of bilateral
\ninvestment agreements and other bilateral and regional
\nagreements. It cannot be denied that a relationship exists among
\ninvestment agreements, investment flows, trade flows and trade
\nrules.<\/p>\n
What should we (developing countries) do?<\/p>\n
First, developing countries should play an active role in the
\nremaining meetings of the working group and strongly voice their
\nconcerns over the issues listed for clarification. In Geneva,
\nseveral developing countries maintained that there were many
\nissues that were still unresolved and that they did not agree
\nthat negotiations should commence. Second, developing countries
\nshould insist that any investment framework -- whether inside or
\noutside the WTO -- should have a fair balance between the rights
\nand obligations of investors and host countries, and between the
\nrights and obligations of host and home governments.<\/p>\n
We are constantly told that the way to reduce poverty is
\nthrough economic growth. Experience tells us this is not true.
\nThe UN's Human Poverty Index 1998 (HPI-2) for industrial
\ncountries showed that Sweden, with one of the lowest rates of
\neconomic growth per person, had the best record in human welfare.
\nWhereas the U.S., with the highest rate of economic growth -- and
\na higher per capita GDP than Sweden -- had proportionally more
\npeople who were \"functionally illiterate\" (20.7 percent) than in
\nany other industrialized country. Ten percent of the U.S.
\npopulation depended on private charity for food and 44 million
\nhad no health coverage.<\/p>\n
The WTO, with the absence of higher authority, treats free
\ntrade as an ultimate good and its experts are forced to make
\ndecisions on social and environmental issues that are outside
\ntheir terms of reference and beyond their competencies.
\nEconomists still believe that further economic growth -- of
\ncourse through trade -- will relieve poverty. This is how free
\ntrade or \"market fundamentalism\" has become the organizing
\nprinciple of the world. Be careful of such fundamentalism. It is
\nso subtle that we do not even realize we are part of it.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/part-2-of-2-trade-a-market-fundamentalism-1447893297",
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"sponsor": "Okusi Associates",
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