Not content with its success in freeing world trade through the new GATT Treaty and creation of the WTO (World Trade Organisation), pressure is on to give even greater access for private investment in all countries.

The European Union has been pushing to get the WTO to negotiate a new treaty on foreign investment that would give foreign investors the right to enter any country and be treated in the same way as local firms. Some developing countries, particularly in Asia, are protesting that the WTO should be focusing on the effects of the Uruguay Round rather than taking on a new agenda, and the extent to which the new treaty is being implemented.

This move to allow foreign free access to developing countries for foreign investment would provide a legal basis for countries to intervene in host countries on behalf of the investors. A joint statement by 30 NGOs from 18 countries stated that the proposed new multilateral treaty of foreign investment would violate the sovereign rights of countries to determine their own economic and social policies. The NGOs expressed "concern and anxiety" over these moves by some Northern countries, particularly the EU, to get the WTO to establish a new treaty since such a proposal would abolish the power and legitimate rights of states and peoples to negotiate the entry conditions, behaviour and operations of foreign companies and foreigners.

Already, as a result of the GATT Treaty, the financial loss until the end of the century to LDCs (least developed countries) is estimated to be at least US$3 billion. This will only increase their marginalisation in the world economy according to UNCTAD (UN Conference on Trade and Development). According to the NGO statement, increased negative effects will be:

• The losses and closures of many farms and local firms;
• Increased unemployment;
• Greater profit outflow leading to balance of payments difficulties;
• The inability of the domestic sector to build its capacity;
• Loss of economic and political sovereignty;
• The substantial buying of land and property by foreigners.

Adverse environmental and cultural effects would also be experienced, as more foreign firms introduce new industries, industrial products and cultural services in an unchecked manner, and at an accelerated pace. As the NGOs remarked, the way the proposal was being pushed onto the WTO agenda was yet another illustration of the secretive, undemocratic, and unaccountable workings of the WTO, where the governments or trade officials of a few major countries can determine the process without notifying, much less consulting with the public or even their parliaments/legislatures. "A direct consequence of this is that the financially powerful lobbies - particularly large corporations - are able to promote and/or further their interests through WTO rules. It is thus imperative that mechanisms be created to ensure the WTO is accountable to the people in all countries."

Source: Third World Economics, January 1996.