Unwanted, Unproductive and Unbalanced:

Six Arguments Against an Investment Agreement at the WTO

May 2003

Executive Summary

This paper is a response from leading UK development organisations to some specific arguments put forward in support of a multilateral investment agreement (MIA) at the WTO. Rather than reiterate all the arguments against such an agreement, it challenges some particular claims put forward by proponents of an MIA. The paper demonstrates that – despite the EU’s attempt to repackage it as an ‘Investment for Development Framework’ (IDF) – such an agreement would be against the interests of developing country members of the WTO.

This paper does not engage with the wider debate on the merits and challenges of foreign investment. Foreign investment can bring genuine benefits to the economies of developing countries and to some of the poorest communities in those countries. Yet it is wrong to assume that it will necessarily afford these benefits, or that foreign investment does not bring its own risks. The international community has an obligation to ensure that foreign investment works to the maximum benefit of development, and to guard against any threats to that higher goal.

THE SIX ARGUMENTS
1. An MIA would not increase FDI flows to the poorest countries
2. Non-discrimination is not a successful development strategy
3. GATS-style flexibility is a myth
4. An MIA at the WTO would not be a balanced agreement
5. An MIA would not see the end of bilateral investment treaties
6. A new set of complex negotiations might break the Doha camel’s back
References

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This paper was written by: Michael Bailey, Oxfam; Duncan Green, CAFOD; Peter Hardstaff, World Development Movement; John Hilary, Save the Children and Claire Melamed, Christian Aid.