INDIA CAUTIONS DEVELOPING COUNTRIES ON MULTILATERAL FRAMEWORK ON INVESTMENT
INTERNATIONAL CONFERENCE ON TRADE, INVESTMENT & DEVELOPMENT BEGINS
Date : 19 May 2003
Location : New Delhi
India has called upon on the developing countries to examine carefully the proposals being put forward in the World Trade Organisation (WTO) by some developed countries to move for negotiations for concluding a multilateral framework on investment. Inaugurating an International Conference on Trade, Investment and Development organised by the Department of Commerce, in cooperation with UNCTAD (United Nations Conference on Trade and Development), Shri Rajiv Pratap Rudy, Minister of State for Commerce & Industry, underlined that follow-up actions on the Doha Ministerial Conference, which had sought to place the needs and interests of developing countries at the heart of the Doha work programme should be based on the touchstone on whether they would advance the development prospects and objectives of developing countries.
The International Conference is being attended by senior officials from 16 developing countries, including India, drawn from Asia, Africa and Latin America with several experts and Resource Persons making presentations on possible implications of closer multilateral cooperation on investment on their developmental policy objectives. The three day Conference will focus on various aspects including different forms of foreign investment and their impact, pre and post establishment national treatment, performance requirements and investors’ and home country obligations etc. The concluding address of the Conference will be delivered by Minister of Commerce and Industry, Shri Arun Jaitley on the final day of the Conference, viz. 20th June 2003.
Shri Rudy drew attention to the fact that the Doha Ministerial Declaration required that the decision on the negotiations and the modalities have to be taken by ‘explicit consensus’ at the Fifth Ministerial Conference to be held in Cancun, Mexico from 10-14 September 2003. Pointing to the clarification given by the Chairman of the Doha Ministerial Conference about ‘explicit consensus’, that this would give each member the right to take position on modalities that would prevent negotiations from proceeding until the member was ready to join the consensus, Shri Rudy said that this would enable developing countries to exercise their decision based on their perceived interests and objective assessment.
The Minister stressed the fact that when the issue of a multilateral agreement on investment was discussed in the OECD, as late as during 1995-98, several developed country participants came out with requests for exemptions, which, inter alia, led to the very abandonment of the negotiations in the OECD. He further stated that the participants in the OECD process were all countries that had reached a certain level of development, whose economic problems and concerns had largely transcended those of the large majority of the WTO Membership who were developing countries and LDCs. He also pointed out that the investment regime that these countries had in place in earlier decades had strict regulations on entry and establishment. Several countries also imposed performance requirements of various kinds. It would not, therefore, be appropriate, he said, to expect developing countries to be not sensitive about a possible multilateral agreement curbing their ability to influence investment inflows as per their priorities or development goals.
Several of the issues regarding possible implications of a multilateral framework had been discussed in the WTO Working Group on Trade and Investment. The discussions brought out the complexity of the issues involved, underlined the enormity of the implications of certain proposals and highlighted the divergence of views among the Membership on each of the issues discussed. Moreover, it also brought out the limitations of a trade negotiating body discussing complex investment issues, he said, adding that in undertaking this examination it was important to keep in view what was the vision that had been envisaged for WTO, in the years to come. Was it that of a rule making behemoth seeking to discipline every area of economic policy. Or, should its scope be limited only to trade and trade related issues, he asked.
In his welcoming remarks Commerce Secretary, Shri Dipak Chatterjee invited the participants to address two important questions, namely whether there was a need for such a framework and if WTO was an appropriate forum for this purpose. He also added that India considered it useful to host an international conference on this important subject, which could analyse all the issues and implications in some depth from a developing country perspective.
Earlier, introducing the Government of India – UNCTAD – DFID project titled "Strategies and Preparedness for Trade and Globalisation in India". Dr. Veena Jha, Coordinator/UNCTAD in India, said the objective was to assist all stakeholders in understanding the development dimension of key trade issues, particularly as they related to the current WTO agenda and to strengthen the human and institutional capacities for analysis of globalisation related issues.
Well known international experts and resource persons participating in the Conference include: Mr. Kamal Malhotra, UNDP; Mr. Karl Sauvant, UNCTAD; Mr. Martin Khor, Third, World Network; Prof. Sornarajah, University of Singapore; Prof. Sol Picciotto, Lancaster University; Dr. Nagesh Kumar, RIS; Ms. Mina Mashayekhi, UNCTAD; and Mr. Richard Eglin, WTO. 16 developing countries are represented in the Conference, viz., Argentina, Bangladesh, Brazil, China, Egypt, Indonesia, Jamaica, Kenya, Malaysia, Morocco, Nigeria, Philippines, Tanzania, Venezuela, Zambia and Zambia.