DEVELOPING NATIONS VOICE OPPOSITION TO NEW ISSUES

6:27 PM Oct 2, 1996

DEVELOPING NATIONS VOICE OPPOSITION TO NEW ISSUES
New Delhi 1 Oct (TWN/Mahesh Prasad) -- Developing countries from South-East Asia, South Asia, Africa and Latin America have evolved a common approach against introduction of new issues, such as relationship between trade and investment, social clause and trade and environment, for the Singapore Ministerial Conference (SMC) of the World Trade Organization in December.

A meeting of officials from a cross-section of these developing countries was of the "unanimous view" that the SMC offered an opportunity to take stock of the Uruguay Round Agreements and their implications for the multilateral trading system and that the most important item on the agenda of the Singapore meeting should be a substantive review of the implementation of these agreements since the entry into force of the WTO.

A chairman's statement issued at the end said that on the proposed Multilateral Investment Agreement (MIA), the meeting was of the view that "there is a serious flaw in the proposition that what is good for transnational investments is also necessarily and always good for development.... decisions regarding the policies to be adopted for permitting foreign investment into a country should be left squarely within the competence and jurisdiction of the government of each country."

The meeting, held at Indian initiative with a view to evolving a common approach on the new issues, felt that "Transnational investments can have, in different circumstances either positive or negative effect on overall employment creation and maintenance of jobs in the small-scale and cottage (industry) sector, technology transfer and absorption, environment, regional development, poverty alleviation and the like."

Noting that certain WTO members were pushing for initiation of discussions on linkages between trade and investment in the WTO, by way of 'an education process', the meeting was of the view that "Unless properly regulated to suit the national interests of each country, the impact of transnational investments can turn out to be more adverse than favourable."

The underlying assumption in pushing these discussions "appears to be that transnational investments are invariably good for the global development process and if multilaterally negotiated rules governing such investments can be put in place, both trade and development will be promoted on a global scale," a statement issued at the end of the meeting said.

The statement said: "Thus, while countries are trying to promote inward investments autonomously in different degrees, and some countries have more liberal inward investment regimes, the effort to bind all countries into a common framework of disciplines concerning transnational investments does not in the view of many participants appear to be well-considered and equitable."

The meeting noted that "the UNCTAD-IX Conference has already mandated UNCTAD to study all aspects of the investment issue, including the Multilateral Investment Agreement (MIA). Many participants felt that UNCTAD is the most appropriate forum to undertake an educative process since the WTO is a negotiating and rule-making forum. Besides duplication is to be avoided."

The participants noted that "the WTO is mandated to look into the need for supplementing provisions contained in the TRIMs Agreement in 1999-2000, by which time developing countries would have had the benefit of discussions and study in UNCTAD."

On Competition Policy and Rules, while agreeing that at present many developing countries do not have competition laws, the meeting noted that "the UNCTAD-IX Conference at Midrand has mandated UNCTAD to examine the issue relating to competition law of particular relevance to development, carry out analytical work on restrictive business practices and assist developing countries in formulating necessary domestic policies and regulations."

"Keeping in view the expertise of UNCTAD in this area, the Meeting agreed that developing countries would benefit from the results of the study and analysis at UNCTAD. The meeting also agreed that analysis and examination in UNCTAD should be comprehensive and should also look into trade policy measures having anti-competitive effects."

The statement added: "Many participants agreed that keeping in view the linkage between investment and competition policy, it would be beneficial for developing countries if both the subjects are taken up in the WTO, as part of the TRIMs review, together in 1999-2000, as envisaged in the TRIMs Agreement, after the analytical work is completed in UNCTAD:"

On Social Clause, the statement said that while "the delegations expressed full commitment to the pursuit of national policies to protect labour rights and advance labour welfare," the meeting was of "the unanimous view that there is no empirical evidence establishing a clear linkage between trade and labour standards."

The meeting expressed concern "about the persistent efforts to bring this non-trade issue on to the agenda of the WTO notwithstanding the fact that the International Labour Organization (ILO) is an appropriate forum to look into the issue and has the requisite competence and expertise in the area." The meeting concluded that "the subject of labour standards should not be brought into the WTO in any form."

On Trade and Environment, an issue discussed in the WTO Committee on Trade and Environment (CTE) for about two years now, the meeting "recalled the RIO principles recognized the need to take into account the developmental context of environmental standards, to avoid unilateralism and disguised protectionism on environmental justifications and to acknowledge the common, but differentiated responsibilities in addressing environmental problems."

The statement said: "It has been recognized that the linkages between trade and environment are complex, but that trade is not the primary cause of environmental problems. Major areas for further work include, inter alia, the relationship between the multilateral trading system and Multilateral Environment Agreements (MEAs), and the effect of environmental measures on the market access of developing countries, particularly the need to safeguard and enhance their market access and make available environmentally sound technologies and products (ESTAPs) on fair and favourable terms for meeting environmental obligations."

The meeting also felt that consideration should be given to the transfer of ESTAPs to developing countries on favourable, non-commercial and equitable terms" for effective approaches to address environmental problems."

There was a "strong objection to unilateral actions and disguised protection through trade measures taken for environmental purposes. Many delegations agreed that the present Article XX of the GATT 1994 is adequate to address all legitimate trade measures taken for protection of the environment."

The meeting gave importance to the removal of all trade restrictions and distortions having negative effects on environment and agreed further work is required on all issues under the ten items on the CTE's work programme.

On Government Procurement, the meeting felt that developing countries should at this stage continue to retain the option on "joining the plurilateral government procurement agreement only as and when they perceive this to be beneficial to them." The meeting "agreed that it would be necessary to get more clarifications about some proposals on this subject to consider a multilateral agreement on government procurement is desirable."

The delegations expressed satisfaction that the meeting has "contributed positively towards building up better understanding about 'new issues'. It emphasized the need to continue this process of mutual consultations and exchange of views in Geneva as well as Capitals during the runup to the Singapore Ministerial Meeting."