SUNS 4302 Thursday 15 October 1998



Trade: OECD MAI talks "clinically dead" ?



Geneva, 14 Oct (Chakravarthi Raghavan) -- French Prime Minister, Lionel Jospin, announced in the French Parliament Friday that France would not participate any more in the OECD negotiations for a Multilateral Agreement on Investment, and said that the subject should be taken up at the World Trade Organization.

Earlier on Tuesday, leading German NGOs tracking these negotiations, said that the OECD-MAI negotiations slated to resume on 20 October after a six month recess is "clinically dead, and not likely to resume", says.

According to the press release sent out from Bonn by the WEED and GERMANWATCH, the French government in an official letter to the OECD has asked for the cancellation of the talks at the OECD set for 20 October, after a six month recess for reflection.

According to the press release, the former French EU-Secretary and President of the European Council, Catherine Lalumiere, presented her report on the MAI to the French cabinet recommending two options: either the text is radically modified or the negotiations should be
cancelled completely.

With the French delegation absent from the 20 October meeting, the discussions will only be informal, says Germanwatch.

Mr. Schomerus, under secretary in the German ministry for Economic Affairs, who was appointed the new chief negotiator, will not participate in these talks, says the NGO release and quotes a
representative of the German Ministry of Economy as saying: "you may draw the conclusion that he won' be available at all as chief negotiator."

WEED and GERMANWATCH regard the decision of the French government as a great success for the international campaign against the MAI.

For the NGOs, Dr. Rainer Engels said: "The train of neo-liberalism has been stopped for a while. The MAI is cast aside until further notice. Now there is enough time to catch the train heading towards sustainable development."
Peter Wahl of the German NGOs however warned: "We have to take precautions against the resurrection of the MAI in a different context such as the WTO or the IMF."

Trade diplomats in Geneva note that the abandonment of MAI negotiations at the OECD, and its being shifted to the WTO, has long been an objective of the government of France, particularly of the Socialist French Prime Minister Lionel Jospin.

Some believe that France hopes that the developing countries would be unwilling to go in providing investment rights to foreigners as far as the US and neo-liberal ideology seeks.

However, at the WTO, it will not be France that will negotiate but the European Community, though under the EC's internal processes, the EC member countries have to agree on a mandate and okay the accords by consensus. But the fact that it will be the negotiating instrument, and can gain jurisdiction over the members after the agreement, is also one of the reasons the EC commission has long favoured a new round with many issues,  so that it can present it to its members as a single package for them to accept or reject.

Some trade observers caution that unless developing countries organise themselves carefully, they may be worse off. Several of them have been depending on UNCTAD, but though mandated in May 1996 at Midrand, the secretariat of UNCTAD dealing with this issue has produced no study so far on the development implications, even as it promotes multilateral investment rules through seminars and symposia funded by the EC, and in some studies and presentations at the closed door meetings of the WTO study group on trade and investment.

The NGO campaign in Washington against the IMF, some Third World delegations note seems to be ending up with IMF being required to exercise more powers over the developing world to open up their trade and other markets, and developing countries may be worse off as a result.

The shift of the investment negotiations to the WTO may similarly result in such a situation -- with rights of TNCs safeguarded, as also with some labour and environmental standards built-in to mollify northern labour and environment groups.