Why failing to include investment issues at WTO should be celebrated
A push by 39 WTO members, including China, Russia, the EU, Argentina, Brazil and Mexico to reintroduce formal discussions on investment facilitation at the 11th World Trade Organization (WTO) Ministerial conference has failed.
Starting a working group on investment would have broken a historical blockage on this issue. Developing countries rejected the inclusion of investment issues in WTO at the Singapore ministerial in 1996, and then again in Cancún in 2003.
In Buenos Aires, it was presented under the disguise of “Investment facilitation for development” in an attempt to differentiate it from the highly discredited international investment protection system.
“To consider expanding investment protection at WTO is bewildering, particularly before assessing the, mostly unrealised, benefits of the system, vis-a-vis its proven negative impacts. Accepting the proposal presented by Friends of Investment Facilitation (FIFD) group would have opened the door for future discussions on a multilateral framework on investment protection and investor–state dispute settlement. Governments around the world have been hit with multimillion-dollar lawsuits by foreign investors for advancing legislation that aimed to benefit people and protect the environment. Latin America and the Caribbean have been the worst affected.” said Cecilia Olivet, researcher with the Transnational Institute.
The dangers of the investment protection agenda for Latin America and the Caribbean (LAC) have been exposed in the report ISDS in Numbers published on Monday by the Transnational Institute. The report presents cold hard figures showing:
Latin American and Caribbean (LAC) states have been sued by foreign investors 234 times, representing 28.6% of all known investor-state disputes around the world.
Argentina, Venezuela, Mexico, Ecuador, Bolivia and Peru accounts for 77.3% of the total number of claims against LAC countries.
Investors have won in 70% of the cases brought against LAC countries.
LAC States have already had to pay foreign companies 20.6 billion USD, this is equivalent to ten times the total cost of rebuilding in Mexico after the 2017 earthquakes or Bolivia’s budget for health and education for four whole years.
Investors from the United States, Canada and Europe brought 89% of the total claims.
23% of the claims concern the mining, gas and oil sectors and many seek to protect the environment and the rights of communities, as well as policies to make companies pay more taxes to the state in these sectors.
“Argentina’s enthusiasm for investment protection is incomprehensible. They are still signing new investment protection treaties and cheer leading investment facilitation on the WTO agenda even though the country has been sued more often than any other in the region and has lost 88% of the concluded cases,” said Luciana Ghiotto, researcher with the Transnational Institute.