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TWN INFO SERVICE ON WTO ISSUES

Geneva 10 Oct 2001

DEADLOCK ON INVESTMENT AND COMPETITION ISSUES IN WTO

On 9 Oct, there was an informal meeting in the WTO to discuss the draft Ministerial Declaration paragraphs on investment and competition.  That declaration gave an option, whether to start negotiations on these two issues, or whether to continue the work of the working groups.

According to sources present at the meeting, there was a big split down the middle among the WTO Members.  The main proponents of starting negotiations for agreements on investment and competition were EU and Japan.  The US was also in favour but not major demandeurs.  Most developing countries in Asia and Africa opposed negotiations as rules in these areas would infringe on government's rights to set national policies on investment and competition and the agreements would tie the hands of governments to regulate as they deem appropriate.  Among those who spoke against negotiations were Tanzania (for LDC countries), India, Malaysia, Uganda.

The EU proposed that a plurilateral approach can be taken to the two subjects (ie countries can choose whether to opt in or opt out of the agreements).  However there was wide opposition to this, even from some countries that are in favour of negotiations.  Those who opposed this plurilateral approach said WTO was a multilateral organisation and there would be systemic problems if it started a range of agreements on a plurilateral basis:  there could thus be negative longterm implications.

Tanzania (speaking for LDC countries) said the LDCs had not yet been able to analyse the impact of rules on these two subjects on their countries and they are thus not ready to negotiate rules on these areas.

These two issues are central to the debate on whether new and non-trade issues should enter the WTO as subjects of new agreements. Yesterday's meeting showed that the WTO members are truly split down the middle on the issue and there is thus no consensus.

A few countries have floated the idea that there should be continuation of the study process in the working groups for two years and then automatically switch to a negotiations by the time of the 5th Ministerial meeting.  However this is also bound to be opposed by those who do not want negotiations.

 


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