2003/03/22

NGOs launch campaign against investment agreement

"El Comercio", Lima, Peru

Forty non-governmental organizations from different continents announced today a campaign focusd on stopping the launch of negotiations in the World Trade Organization (WTO) on a multilateral investment agreement, which they consider harmful for developing countries.

Geneva. Forty non-governmental organizations from different continents announced today a campaign focusd on stopping the launch of negotiations in the World Trade Organization (WTO) on a multilateral investment agreement, which they consider harmful for developing countries.

Among the NGOs are Oxfam, the Center for Consumer Defense of El Salvador, Public Citizen from the United States., the Third World Institute from Uruguay, REBRIP from Brasil, the Solon Foundation from Bolivia, and the Third World Network, along with others from Denmark, Norway, Switzerland, the United Kingdom, Senegal and Malaysia.

In the press conference announcing the campaign, the NGOs warned that the agreement being pushed by the U.S., the European Union (EU) and Japan will create a corporate bill of rights that will fundamentally favor multinational corporations while at the same time eviserating the ability of governments to regulate foreign investment.

"This type of agreement will tie the hands of governments and will make developing countries extremely vulnerable to financial crises as well as facilitating the control of multinational corporations over local businesses and economies," declared Martin Khor of the Third World Network from Malaysia.

British citizen Peter Hardstaff, from the World Development Movement based in the United Kingdom, noted that the industrial countries of today became rich by regulating investment and "discriminating" [between types of investment], a soverign right that these countries now want to deny developing countries.

Salvadoran Raul Moreno of the Hemispheric Social Alliance of the Americas predicted that an agreement such as the one proposed would have a negative impact from a economic, social and environmental viewpoint, as this is already happening in Mexico, said Moreno, as a result of the North American Free Trade Agreement (NAFTA).

The NAFTA agreement has already produced more than twenty court cases between the U.S., Canada and Mexico and the [NAFTA] tribunals have forced governments to pay millions of dollars in compensation to multinational corporations for having ordered, for example, the closing of a toxic waste plant, as happened in San Luis Potosí (Mexico), Moreno said.

Another case mentioned by Moreno for its significance is that of the U.S. corporation Bechtel which sued the Bolivian government for US$25 million, alleging that it never got profits promised when it took control of the administration of water services in Cochabamba because it was forced to abandon operations there after popular protests against water price hikes. Bechtel is suing the Bolivian government in the International Center for Settlement of Investment Disputes (ICSID), an agency of the World Bank, after having established an address in Holland in order to use an investment treaty between that country and Bolivia given the lack of a simliar agreement [allowing private enforcement of investor rights] between Bolivia and the U.S.

Moreno noted, on the other hand, that the type of investment that goes to Mexico and Central America are in the area of unskilled labor - which generates employment that is both precarious and poor quality - because in many o f these countries there are not national employment/labor policies, which in turn allows foreign companies to establish themselves "without giving anything back." Moreno gave the example of his country, El Salvador, which exports about 65% of its total production to the U.S., 90% of which is from the maquiladoras (fundamentally in the textile sector), only to have a large part of these exports re-imported [to El Salvador], but as more expensive goods after having had well-known U.S. brand names attached to them.

"For all of these reasons, we insist that the WTO member countries reject the plans for an investment agreement," said Celine Charveriat of Oxfam. According to Chaveriat, WTO members should focus on reaching agreement in agriculture and other areas of interest for the developing world such as special and diferential treatment and access to medicines. The NGO representatives said that they will be present to lobby against the agreement in the next meeting of the G8 in Evian (France) next June, during the WTO Minsiterial planned for the middle of september in Cancun (Mexico) and at the next Free Trade Area of the Americas Ministerial Meeting in Miami (U.S.) in November.

(Translation by Timi Gerson, Public Citizen, original in Spanish published by "El Comercio", Lima, March 21, 2003)