Trade and investment are important elements in job-creation, poverty eradication, and towards sustainable development. However, the international trade and investment regime dominated by Bretton Woods institutions — International Monetary Fund (IMF), World Bank (WB), and the World Trade Organization (WTO) — have skewed rules towards the benefit of large industrialised countries and their corporations, at the expense of peoples.
The WTO remains the most important mechanism to advance trade and investment liberalisation multilaterally. It has resulted to maldevelopment of developing country economies: the collapse of small to medium local enterprises, privatisation of services, resource grabs, job losses and insecurity, low wages, and chronic poverty. Due to such impacts, developing countries' demands to include ‘development’ in the WTO agenda pressured developed countries to come up with the Doha Development Agenda in 2001. However, negotiations have remained dormant until 2013, due to disagreements and non-implementation of commitments. The decade-long deadlock in the Doha round led to the proliferation of bilateral and regional trade and investment agreements.
Instead of mechanisms to correct negative impacts of the WTO, bilateral and regional free trade agreements (FTAs) were utilised by large industrialised countries and their corporations to pursue agenda that had failed through multilateral means. This furthered unequal trade, with developing countries becoming venues for the aggressive implementation of the liberalisation agenda. Still, these FTAs did not deliver development for the poor. Those who belong to the (conservative) global poverty estimate of two dollars a day has doubled since the last three decades, and nearly reached half of the world’s population.
The rise of the 21st century trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), Trans-Pacific Partnership Agreement (TPPA), the Trans-Atlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA), threaten to expand the neo-liberal agenda. These agreements reach deeper ‘behind the borders’ as they aim to control how governments make economic decisions — related to regulation, competition policy and investor protection. They come at expense of people’s rights, especially through Investor-State Dispute Settlement (ISDS) that allows corporations to sue governments for enacting regulatory laws that endanger profits. Negotiations are done in secret, without democratic consultation for those most affected, and without rigorous impact-assessments on rights.
The international trade and investment regime needs to undergo fundamental changes if it is to benefit all, especially the marginalised groups in developing countries. International trade and investment rules and institutions need to respect human rights, and uphold the principles of democratic ownership, solidarity, and complementarity if they are to work towards creating economies that enable dignified lives, decent employment, living wages, provide opportunities for entrepreneurship democratically, and is not based on exploitation of people or natural resources or environmental destruction. This can only be achieved through peoples and their organisations' awareness of the impacts of trade and investments on their rights, and their engagement with governments and trade and investment institutions at national, regional, and global levels, to promote their rights.
Some of our work on this program theme: