Sharp divisions on new issues

by Chakravarthi Raghavan

Geneva, 30 Sep 99 -- The informal discussions in the informal heads of delegations meeting of the General Council on investment, competition policy and transparency in government procurement, as new issues to be included in negotiations to be launched at Seattle show a fairly sharp division of opinion between proponents and opponents on each of these, and with a broad hybrid group of countries who have an 'yes, but...' view.

On the investment issue discussions Wednesday, the EC, Japan, Switzerland, Hong Kong China, South Korea, Poland and Costa Rica and the CEFTA (some of the central and east european transition economies) spoke favouring multilateral investment rules being set up in the WTO, and Seattle launching those negotiations.

Pakistan, India, the ASEAN, Egypt said they were not prepared to agree to negotiations on investment being put on the Seattle agenda, and wanted at best the study process mandated at Singapore to continue.

Pakistan was not ready to agree to any recommendations on this to be sent to the ministers, while India said it was a very sensitive political issue, more sensitive than liberalisation of trade. India also noted that some governments had said that investment rules to be put in the WTO should be subject to the WTO dispute settlement provisions. This was far beyond the mandate. The industrial countries had also put many barriers to technology transfers, and india cannot therefore accept negotiations on investment, nor could it accept that negotiations on investment could be separated from negotiations on competition policy, meaning the restrictive business practices of TNCs.

South Africa spoke of the inadvisability of investment issues being dealt with bilaterally or plurilaterally outside of the WTO, but at the same time seemed not willing to go ahead with negotiations to be launched on Seattle, and rather sought continuation of the study process.

Turkey said that while an investment agreement could stimulate investment flows, there was also a lot of speculative flows in such FDI.

Malaysia speaking for the ASEAN countries said they were opposed to any negotiations on investment or competition policy, the two subjects on the Singapore mandate study groups, and could at best only agree to continuation of the study process. They were not prepared to accept any investment agreement negotiations to be put on the Seattle agenda.

Mexico also was opposed to any investment negotiations at the WTO, while Sri Lanka suggested that the Seattle Ministerial meeting should only extend the mandate of the study groups set up at Singapore.

The United States in its intervention made clear that it was still consulting with its domestic constituencies, but that it was opposed to any OECD-tyoe negotiations in the WTO.

Brazil said like the US it too was still consulting its domestic constituencies. It was not at all clear that investment rules at the WTO will actually increase FDI. Brazil had the second largest inward FDI, but there was no investment agreement at the WTO. And the country having the largest FDI inward flows (China) was not even a member of the WTO.

The US, speaking again on Thursday, said that the US was not interested in any investment agreement at the WTO and did not support negotiations at the WTO on investment or competition policy.

The Dominican Republic also did not agree to support investment negotiations, while Jamaica said it was opposed to such negotiations.

On the competition policy issue, where the EC is the main proponent, the EC representative suggested that some of the concerns over the RBPs of transnational corporations raised by developing countries would be met partially by its proposal for negotiations on competition policy and for WTO dispute settlement system.

Switzerland, Korea, Japan, Poland, the Czech Republic and other CEFTA countries supported competition policy rules negotiations, but with some varying nuances.

The US made clear it would not support competition policy negotiations in the WTO and said its views were supported by many other delegations. The WTO was not yet ready for such negotiations, and the US was against applying the WTO's DSU to competition policy.

India said it had originally thought that the competition policy issues at the WTO would address the development concerns of developing countries like the RBPs of corporations. But the views of proponents suggested they did not envisage this, and many others have excluded anti-dumping policies.

The Singapore mandate for investment and competition policy study process was explicit that for any negotiations there must be consensus and this was lacking. A number of others also spoke in oposition of negotiations, but willing to favour continuance of the study process including Hong Kong China, Mexico, Cuba, Ghana, Jamaica, Mauritius, Indonesia, Egypt, El Salvador, Pakistan and Honduras.

Several others who supported competition policy negotiations, made clear that this had to include anti-dumping issues as well. (SUNS4120)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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