Putting it to Work in Developing Countries - Nathan Associates

Exhibit 6-1
Issues for the WTO Working Group on Trade and Investment
The Doha Ministerial Declaration of
November 2001 tasked the Working Group
on Trade and Investment (WGTI) with examining
issues shaping the agenda of potential
WTO investment negotiations, to begin in
2003. Although such negotiations never materialized,
these issues included:
• Scope and definition of “investment” and
“investor.” Members have debated whether
to employ a narrow (enterprise- or transaction-based)
definition of investment or a
broader definition based on assets, as well as
different categories of investment. Some,
including the United States, insist on a
broad definition (i.e., one that includes
portfolio as well as FDI). Others believe the
Doha mandate is limited to a discussion of
long-term investment.
• Transparency. Many members see transparency
as essential to a stable, predictable,
and secure climate for FDI. Nonetheless,
not all agree on the nature and depth of
transparency provisions or on how to
administer rules and regulations.
Developing countries have expressed concern
over onerous transparency commitments
that would be difficult for them to
implement.
• Development provisions. A number of developed
and developing countries have advocated
provisions that would allow developing
countries to regulate investments
according to national interests.
• Consultations and dispute resolution.
Concerns have arisen with respect to the
connection between a prospective WTO
investment agreement and the existing
WTO dispute settlement system.
• Technology transfer. Members have considered
how multinational corporations transfer
technology and how host economies
absorb it.
• Nondiscrimination and pre-establishment
commitments. Some developing countries
want to be able to discriminate in favor of
domestic firms and screen FDI.
• General and balance-of-payment safeguards.
Members agree that the kind of general and
security exceptions usually found in WTO
agreements should apply to any future
investment agreement. They also tend to
agree that these conditions must be clear to
ensure that arbitrary or unjustifiable discrimination
is not permitted.
climate. 16 In any event, the general experience of
FTAs and RIAs suggests that (1) such accords
encourage adoption of international standards
and best practices, and (2) despite claims to the
contrary, do not tend to divert FDI from nonparticipating
to participating developing countries.
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WTO impacts through TRIMs and TRIPS.
Various WTO disciplines on investment have
liberalized trade, at least to the extent that countries
have challenged illegal practices so that losing
parties have had to introduce reforms.
Trade-related investment measures affecting the
automobile sector have been challenged and
reformed in Canada, India, and Indonesia; and
investment-related measures involving trade in
services have been challenged and reformed in
Mexico’s telecommunications regime. Separately,
numerous dispute settlement cases have treated
intellectual property and the enforcement of
intellectual property protections.
Most BITs and specialized investment agreements,
including those contained in FTAs and
RIAs, contain dispute settlement provisions. As
BITs have proliferated, so have dispute settlement
cases. Individual investors have brought
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