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The rich industrialized countries are insisting that the WTO not only launch a new round of world trade negotiations (formally to be decided at Cancun in September 2003), but that rules restricted to trade issues now be extended to protect foreign direct investment. Developing countries would henceforward be unable to protect their own business sectors and determine their own policies towards foreign capital. The authors explain in detail the North's determination to give overseas investments by their transnational corporations privileged protection. These initiatives have included, inter alia, the OECD's failed MAI initiative and the World Bank-sponsored Multilateral Investment Guarantee Agency. In particular, the authors focus on the WTO's General Agreement on Trade in Services (GATS) and Agreement on Trade-related Investment Measures (TRIMS). They spell out the consequences for developing countries and examine whether there is really a case for a new multilateral framework on investment within the WTO. They propose various options for developing countries in resisting what amounts to a new form of Western protectionism.
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Carlos M. Correa is Director of the University of Buenos Aires' Masters Programme on Science and Technology Policy and Management. Nagesh Kumar is Deputy Director General at the Research and Information System for Developing Countries, New Delhi.
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