Trade Organisation (WTO), arguing
that it would seriously hamper
efforts to guide development.
''This is the most important and
controversial issue being debated by
governments here at the WTO ministerial
conference," said Martin
Khor, director of the
Penang-based Third World Network. ''The multilateral
agreement on investment would deprive
governments of their rights to
control foreign investment."
As currently proposed, an investment
agreement under the WTO would
grant investors the right to invest
their money in any member country
and in any sector except security
areas. Foreign investment projects
would have to be granted national
treatment, meaning they would be
accorded the same rights as domestic
investment projects.
According to Khor, this would require
developing countries to allow,
among other things, 100 per cent
foreign ownership of companies, the
free flow of capital including
repatriation of profits and
non-discrimination against foreigners
in other areas, for instance in
owning land, paying taxes or the
protection of property.
MIA supporters at the WTO ministerial
conference in Singapore, with
the European Union foremost among
them, are proposing that a working
group be set up to study the relationship
between trade and
investment.
Thai delegates, meanwhile, are decidedly
ambivalent about the
proposed investment agreement,
neither strongly opposing it nor supporting it.
''Some Asean colleagues say we shouldn't
discuss it at all, and
others say we shouldn't have
a multilateral agreement, but it's okay to talk
about it," said Deputy Prime Minister
Amnuay Viravan on Monday. ''We
[the Thai government] won't accept
national treatment [of foreign
investment]."
''A treaty on investment is not really
necessary because there is
already strong demand from countries
for a limited amount of
capital," Commerce Minister Narongchai
Akrasanee said yesterday, implying that
competition among countries for
foreign investment would ensure that
investors are treated fairly. ''However,
if they [developed
countries] want to study it, we
are willing to study it," he added.
Khor said that the WTO is split over
the MIA. Some want to see it
passed, others are willing to discuss
the links between trade and
investment, and about 15 to 20 countries
oppose the agreement and say
such links should be discussed instead
by the United Nations
Conference on Trade and Development,
which has a broader mandate than
the WTO, and where decisions are
non-binding.
Khor, along with many NGOs from developing
countries, favour the
latter option.
''The MIA would go against the whole
fabric of how a country builds
itself," he said. ''Investment is
separate from trade, so the same
regime should not automatically
apply."
Khor predicted that the issue of
the multilateral investment
agreement will become the most crucial
debate within the WTO over the next five
to 10 years.