6:11 AM Feb 29, 1996

NGO MEET WARNS AGAINST INVESTMENT TREATY MOVES

Bangkok 28 Feb (TWN) -- Participants at an NGO Conference being held here just prior to the Asia-Europe Summit Meeting (ASEM) have called on the political leaders not to make use of ASEM to introduce new liberalisation measures which they say would be against the interests of developing countries.

In particular, the NGO representatives urged the Asian leaders not to accept an expected proposal by the European Union to introduce a new multilateral investment agreement into the World Trade Organisation, at its Ministerial Meeting in Singapore in December.

The NGO meeting is being attended by 350 representatives of European and Asian citizen groups as well as the media and several members of diplomatic Missions (who are attending as observers).

The Summit, to be held on 1-2 March, will be attended by 15 European leaders and ten East Asian leaders.

On the first day of the NGO meeting, a panel discussion was held on economic issues affecting EU-Asian relations. The highlight of the session was a lively discussion on the EU initiative to get Asian leaders at ASEM to endorse a move towards a multilateral investment agreement in the World Trade Organization.

One of the main objectives of Europe at the ASEM Summit, is believed to be get an Asian-Europe consensus that the WTO's Ministerial Meeting in Singapore this December should be used to launch negotiations on the investment issue.

Arriving in Bangkok for the Summit meeting, European Commission President Jacques Santer was quoted by the Bangkok Post as saying that the meeting was "an opportunity for the European countries to identify areas of cooperation in politics and security and to reiterate their commitment to concluding a multilateral investment agreement with Asia within the framework of the World Trade Organisation."

The EC Vice President, Sir Leon Brittan, was reported as "urging Asian countries to get involved in discussions on the creation of a multilateral investment code."

A draft paper on the European Union Position on ASEM (indicating its priority issues for the Summit) states that: "Senior Officials (of Asem) could be invited to hold discussions aiming at giving investment a high priority in the WTO with a view to preparing the way for negotiations on a global framework of rules for investment.

"A dialogue should be pursued with a view to establishing strong international disciplines in this area covering non-discrimination, investor protection and transparency."

At the NGO Conference, speakers and participants pointed out that if this EU proposed treaty were implemented, there would be adverse consequences for developing countries.

Local firms, farms, banks and other institutions would not be strong enough to compete with multinational companies, and many may have to close, throwing people out of jobs.

"Governments would lose their right to regulate foreign investments, and thus will no longer have control over national resources or economic sovereignty, nor over macroeconomic and financial policies," said Martin Khor, director of the Malaysia-based Third World Network.

"Many Southeast Asian countries that already have balance of payments problems will face a critical situation due to increased outflows of profit and higher imports by the foreign investors."

The NGOs stressed they were not against foreign investments per se which could play an important role in Asia's development, given the right policy context.

But if governments are no longer able to regulate foreign investors (for instance in the areas of equity, technology transfer, import and profit limitations, etc), then the disadvantages will outweigh the benefits, and instead of positive contributions, foreign investment could lead to economic and social disasters throughout the Asian region.

The NGOs stressed that:

* The ASEM meeting should not endorse an EU suggestion to get the foreign investment agreement onto the Singapore WTO meeting's agenda.

* ASEM should instead discuss the many difficulties faced by communities in Asian developing countries as a result of the Uruguay Round of the GATT, including farmers whose livelihoods are threatened by the Agriculture Agreement.

* The EU should not look at Asia simply as a 'commercial opportunity', but instead extend genuine partnership arrangements such as increasing their aid levels to meet the commitments made at several UN Conferences in recent years.