South Perspectives - June 2003

INTRODUCTION

Over the last several years, the developed countries have been ste pping up their efforts to formulate a viable multilateral investment agreement (MIA) that would restrict countries’ ability to control foreign direct investment (FDI), and possibly portfolio investments.

Initially, this was mainly pursued through the OECD, where it was proposed that the developed countries adopt an MIA to which willing developing countries would also be allowed to sign up. Since this move was thwarted in 1998, the main battleground has moved to the WTO, where the possibility of a multilateral investment agreement involving all member countries is now under serious discussion.

Consequently, at the WTO’s Doha ministerial meeting in November 2001, whether to commence negotiations on an MIA was one of the most controversial issues. Even as the final declaration was being drafted, there were disputes over the exact meaning of some of the paragraphs on the investment issue. In the end, it was agreed that the 5th WTO ministerial meeting, scheduled for September 2003 in Cancún, Mexico, would decide whether to proceed with negotiations (as opposed to the current “discussions”) on an MIA.

This paper argues that the decision should be “no”.

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