NGOs launch campaign against investment agreement

Forty non-governmental organizations from different continentsannounced today a campaign focusd on stopping the launch of negotiationsin the World Trade Organization (WTO) on a multilateral investmentagreement, which they consider harmful for developing countries.Geneva. Forty non-governmental organizations from different continentsannounced today a campaign focusd on stopping the launch of negotiationsin the World Trade Organization (WTO) on a multilateral investmentagreement, which they consider harmful for developing countries.

Among the NGOs are Oxfam, the Center for Consumer Defense of ElSalvador, Public Citizen from the United States., the Third WorldInstitute from Uruguay, REBRIP from Brasil, the Solon Foundation fromBolivia, 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 theagreement being pushed by the U.S., the European Union (EU) and Japan willcreate a corporate bill of rights that will fundamentally favormultinational corporations while at the same time eviserating the abilityof governments to regulate foreign investment.

"This type of agreement will tie the hands of governments and will makedeveloping countries extremely vulnerable to financial crises as well asfacilitating the control of multinational corporations over localbusinesses and economies," declared Martin Khor of the Third World Networkfrom Malaysia.

British citizen Peter Hardstaff, from the World Development Movementbased in the United Kingdom, noted that the industrial countries oftoday became rich by regulating investment and "discriminating" [betweentypes of investment], a soverign right that these countries now want todeny developing countries.

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

The NAFTA agreement has already produced more than twenty court casesbetween the U.S., Canada and Mexico and the [NAFTA] tribunals have forcedgovernments to pay millions of dollars in compensation to multinationalcorporations for having ordered, for example, the closing of a toxic wasteplant, as happened in San Luis Potosí (Mexico), Moreno said.

Another case mentioned by Moreno for its significance is that of theU.S. corporation Bechtel which sued the Bolivian government for US$25million, alleging that it never got profits promised when it took controlof the administration of water services in Cochabamba because it wasforced to abandon operations there after popular protests against waterprice hikes.Bechtel is suing the Bolivian government in the International Centerfor Settlement of Investment Disputes (ICSID), an agency of the WorldBank, after having established an address in Holland in order to use aninvestment treaty between that country and Bolivia given the lack of asimliar 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 toMexico and Central America are in the area of unskilled labor - whichgenerates employment that is both precarious and poor quality - becausein many o f these countries there are not national employment/laborpolicies, which in turn allows foreign companies to establish themselves"without giving anything back."Moreno gave the example of his country, El Salvador, which exportsabout 65% of its total production to the U.S., 90% of which is from themaquiladoras (fundamentally in the textile sector), only to have a largepart of these exports re-imported [to El Salvador], but as more expensivegoods after having had well-known U.S. brand names attached to them.

"For all of these reasons, we insist that the WTO member countriesreject the plans for an investment agreement," said Celine Charveriat ofOxfam. According to Chaveriat, WTO members should focus on reachingagreement in agriculture and other areas of interest for the developingworld such as special and diferential treatment and access to medicines.The NGO representatives said that they will be present to lobby againstthe 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 MinisterialMeeting in Miami (U.S.) in November.

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

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