The meeting is at the Washington State Convention and Trade Center


Negotiate, or continue to study?

Since 1997, WTO members have been engaged in analysis and debate about the relationship between international trade and investment, and its implications for economic growth and development. In the Working Group on the Relationship between Trade and Investment, members have examined a range of international investment instruments and existing agreements, and have debated the possible pros and cons of negotiating a multilateral framework of investment rules in the WTO. UNCTAD has played an important role in this analytical process, particularly in helping WTO delegations better understand the development dimension of this subject.

In the preparatory process leading up to the Ministerial Conference, eight separate, and very similar, proposals have been tabled by 29 WTO members recommending that a decision be taken by Ministers in Seattle to begin negotiating a WTO agreement on foreign direct investment (FDI).

These members have made it clear that the agreement they are proposing to negotiate in the WTO bears no relationship to the OECD’s Multilateral Agreement on Investment — in the WTO, negotiations would start from a blank sheet of paper. Their proposals have attracted support from a number of other WTO members, both developed and developing.

At the same time, some other WTO members — developed and developing — have made it clear that they are opposed to a negotiation on this subject in the WTO, at least for the time being. They prefer to continue with the analysis and debate that was begun in 1997.

The key elements of the proposals tabled so far are that:

  • Negotiations would cover FDI only;
  • Development provisions would be central to the framework of rules and disciplines, which otherwise would be based on similar WTO principles such as transparency and non-discrimination;
  • The ability of host governments to regulate the activity of investors should be respected;
  • Trade-distorting and investment-distorting policies and practices should be addressed, through suitable disciplines;
  • Commitments on access to investment opportunities in host countries should be negotiated “bottom-up” (similar to the approach used in the General Agreement on Trade in Services); and
  • WTO dispute settlement rules should apply, but only to government-to-government disputes.

The question of how to treat investors’ responsibilities, and investment protection, has also been placed on the table for consideration in a negotiation, if one is launched.