Free Trade Myths Behind WTO Agreement Exposed

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Free trade myths behind WTO agreement exposed

Friends of the Earth International

Today's new report, claims to expose the arguments for a

new free trade agreement on foreign investment at the World Trade Organisation as groundless myths.

The report, jointly produced by Friends of the Earth and the World Development Movement (WDM), comes just days before thousands of people in the UK take part in a nationwide lobby to oppose the UK Government’s backing for launching such an agreement at the next WTO Ministerial, scheduled to take place in Cancun, Mexico, in September.

The report highlights the European Union as the driving force behind calls for an investment agreement through the WTO, with the European Commission claiming this will bring development benefits to recipient countries. But, the report claims, analysis shows that an investment agreement will primarily benefit large multinational companies, who will gain greater ‘rights to roam’ in the global economy.

The report claims to "explode" thirteen myths used by supporters of the agreement, including:

An investment agreement will lead to an increase in foreign

investment in developing countries

Developing countries are keen to liberalise their economies

Increased foreign investment increases economic growth and

development

The WTO gives developing countries the power to shape an

investment agreement for their benefit

An investment agreement at the WTO will mean an end to the

explosion of bi-lateral investment agreements

Friends of the Earth and WDM, both members of the Trade Justice Movement, are calling plans for new free trade agreements at the WTO to be ditched and for international and national corporate accountability legislation for businesses outside the WTO to ensure that strict standards are applied to companies operating overseas and that communities have rights to challenge bad practice under the UN.

Friends of the Earth Policy and Campaigns Director Liana Stupples said: “Corporate lobbyists and our Government want to spin proposals for a WTO investment agreement into a pot of honey for the developing world. But nothing could be further from the truth. Without binding rules for multinational corporations under the UN, the developing world will have everything to lose and big companies will have everything to

gain. This WTO agreement must not be allowed to go through.”

WDM Head of Policy, Peter Hardstaff said: "The EU and the corporate lobby have conjured up a set of myths and fantasies to give a spurious development justification to launching an agreement that is entirely in their own interests. The facts show that there is no evidence that a WTO investment agreement will lead to even one dollar more being invested in poor countries. We must have international trade rules with the aim of development based on evidence and fact not ideology and self interest. If the UK Government

is serious about making trade work for the world's poor, they must push the EU to drop its backing for an investment agreement. This would help developing countries, most of which have little capacity to negotiate an over-loaded trade agenda. The focus must be reviewing and reforming the existing unfair and unbalanced WTO rules."

For a copy of the report, Investment and the WTO – Busting the Myths is available from DAVE@wdm.org or media@foe.co.uk

[Drunk]

Free trade, in the aggregate, results in NET benefits. Economics 101!