8:47 AM Mar 4, 1996
EU, ASIA DIFFER ON INVESTMENT AGREEMENT
Bangkok 2 Mar (TWN) -- The European Commission appears to have received some setback in its drive to get going at the World Trade Organization negotiations for a Multilateral Investment Agreement which would give foreign investors, mostly transnational corporations, the right to invest in any country and get treatment equal to those enjoyed by the domestic enterprises and investors. The EU failed to get an endorsement for this idea at the just concluded Asia-Europe Summit at Bangkok, and the statements of Asian leaders at that meeting showed that they were opposed to the idea of an MIA. The EU, and its trade commissioner, Sir Leon Brittan had argued in Bangkok in favour of the MIA, saying that this was needed to encourage European investments in developing countries and particularly Asia. Brittan had also attempted to portray the EU move as intended to ensure Asia was not treated in the same way as in the colonial days. He referred to the moves in the OECD to negotiate an investment agreement, and said that Asia should stand up for its own rights, and projected a WTO pact as countering any colonialist moves! But Brittan did not seem to have got far with this sophistry. A detailed study of the EU Commission paper leaves little doubt that the EU motivation is clearly aimed at ensuring that whatever advantage the US or Japan secure for their investors through bilateral agreements would also be available to European investors -- in fact making the EU a free rider. But the Asian leaders favoured voluntary measures by governments to attract investment rather than multilaterally binding rules at the WTO. As the Indonesian Foreign Minister, Ali Alatas put it, "we get the impression that this MIA, based on rules, is an unbalanced approach, with all freedoms being given to the investing countries, but no corresponding freedoms for the receiving country." It was not at all clear, Alatas added, as to what the rights or gains for the host countries would be, and the benefits to investors appeared to outweigh those to recipient countries, Alatas added. Malaysian Prime Minister Mahathir Mohamad, for his part, said "We think that it will not bring about a level playing field." The final declaration out of the Bangkok meeting contained no references to an Investment Agreement and including this on the Singapore agenda. However, the two sides are to meet in Brussels in July to discuss the agenda for the first ministerial meeting of the WTO at Singapore in December. Earlier, Thai Foreign Ministry officials, were reported in the Asia Times of Bangkok, as saying that Malaysia, Indonesia and Thailand have opposed the EU proposal, and have insisted that host countries should have the right to frame national laws regulating the operations of foreign enterprises. A conference of non-governmental organizations, held in Bangkok prior to the EU-Asia summit, also came out in opposition to the WTO investment pact idea. The NGOs called on Asian governments to reject the MIA which, they said, would lead to the closure of many domestic companies and increase unemployment. The NGO statement called on governments to avoid introducing negotiations on a multilateral investment agreement in the WTO and instead focus attention at Singapore on the impact that the Uruguay Round has had on small farmers, women and indigenous people. The NGOs said they supported efforts to increase mutually beneficial trade and investment between Asia and Europe. But they expressed concern that trade agreements as those under the Uruguay Round "only strengthened the power of already powerful economic actors." "Northern powers push trade liberalisation while increasing protection of their own economies through the decisions of multilateral institutions, unilateral trade sanctions and massive internal subsidies. "Combined with the opening up of the agricultural markets of developing countries, as mandated by the WTO, subsidised American and European agricultural exports will further threaten small-holder agriculture in developing countries." The NGOs also focused on the human rights issues and, in their statement, criticised abuses in both Europe and Asia -- mentioning the situation in Northern Ireland and the former Yugoslavia states and continued French rule over Polynesia, as well as human rights problems in Burma and East Timor. On the opening day of the Asia-EU summit, according to press reports, while the EU Commission President, Jacques Santer, mooted the investment agreement question, Indonesia's President Suharto opposed such a multilateral agreement.