Economic Relations Foreign Investment

5 August 1995

The 26th Triennial Congress of the Women’s International League for Peace and Freedom, August 1-6, 1995 in Helsinki, Finland:

The 26th International WILPF Congress demands:

a. that the European Commission drop moves to initiate the setting up of a multilateral set of rules governing the policies of governments on foreign direct investments and also proposing to widen the authority of the World Trade Organizations (WTO) over the regulation of terms of foreign investments worldwide;

b. that this proposal not be adopted by the World Trade Organization. (The present Trade Related Investment Measures [TRIMS] clause of the GATT Agreement does not cover all foreign investments. It only includes trade‐related foreign investments. This EC proposal calls for a blanket coverage of all forms of foreign investment, whether these are trade‐related or not).

c. that every county be allowed to continue to have sovereign rights to determine which foreign investors should come in, what sectors they can invest in, and under which conditions investments can be made. d. that multilateral regulations within the WTO and the Regional Trade Agreements (such as NAFTA, APEC, etc.) should affirm and retain the positive discrimination principles, which means giving weaker countries the needed support to enable them to compete on an equal basis with powerful countries and their corporations.

Background: The proposal, contained in a paper entitled ‘A Level Playing Field for Direct Investment Worldwide’ is

(a) that foreign corporations be given generally free access to any country in the world and be given the legal rights to invest and operate competitively in all sectors of the economy;

(b) that they be accorded national treatment, meaning equal treatment with local corporations but also the most favoured nation status (host countries granting foreign investors specific favourable conditions not available to national investors).

(c) that all restrictions on their operations be removed.

If these proposals are adopted, it would have very significant implications for developing countries, such as:

(a) the restriction or removal of the right to adopt their own independent policies on the conditions under which foreign investments can be made;

(b) the curtailing of freedom to choose their own particular mixture of [p;policies and conditions on foreign investments (e.g., 60% local equity and %40 foreign equity, restriction on foreign investments for strategic industries such as transportation, communication, health, joint ventures);

(c) surrender of their sovereign right to determine investment programs and policies for the benefit of their citizens. These rules would further disenfranchise the indigenous peoples, women, farmers, local communities, of their rights to have access, control and own lands and resources. They would entrench and perpetuate the domination and power of industrialized nations, and transnational corporations over the weak third world countries and thereby facilitate a return to colonialism.