In the ambit of world trade, several initiatives have moved forward since the beginning of the year: the signing of a bilateral free trade agreement between Colombia and the US, whereby the first undertakes to open its economy to industrial products, services, investments, and intellectual property in exchange for greater access to the North-American textile market.

In the ambit of world trade, several initiatives have moved forward since the beginning of the year: the signing of a bilateral free trade agreement between Colombia and the US, whereby the first undertakes to open its economy to industrial products, services, investments, and intellectual property in exchange for greater access to the North-American textile market.

The Commissioner of the European Union for Trade, Peter Mandelson, makes no statement regarding the definition of negotiation modalities to address the issue of the reduction of subsidies to European agricultural products, even as the end of April deadline stipulated by the WTO Conference in Hong Kong approaches. Yet he proposes the urgent resumption of negotiations between the Mercosur and the European Union, probably in an attempt to secure advantages for European manufactured goods exports and consolidate the willingness shown by Brazil and Argentina at that conference of cutting their tariffs in force in keeping with the NAMA chapter discussions.

It is high time for the region’s social movement to engage in this discussion, for if there was massive, and victorious, opposition to the FTAA, there is barely any questioning on the negotiations with the EU, as if European capitalism were better than the American.

The OECD is preparing another Multilateral Agreement on Investment (MAI) for the developing countries. The agreement now called “Policy Framework for Investment” was available for comments by interested parties on the organization’s site in January and February.

Unlike the 1998 MAI negotiations, which failed for lack of consensus between the industrialized countries over an international treaty in the ambit of the OECD, now what is being offered is a package with proposals of “voluntary” application by developing countries.

Said proposals focus on ten thematic axes designed to facilitate investments: investment policy, investment promotion and facilitation, trade policy, competition policy, fiscal policy, corporate stewardship, corporate social responsibility, human resources development, infrastructure development, and financial services and public management.

These proposals are geared to developing countries, without proper consideration of these countries’ contexts, and seek to convince them to adopt a series of procedures to attract investments. The basic argument is the unconditional defense of open economies and trade and investment liberalization, as a pre-requisite for development. Investments will only flow if investors’ interests and rights are totally protected and, in that respect, the original text contains a number of “pearls” which are worth mentioning.

To start, a fiscal reform to prevent a multinational company from being taxed twice, in its country of origin and abroad. It also proposes a reward system whereby companies complying with legal procedures would benefit from tax reductions. It also defends free profit remittances and opposes “regulatory burdens”.

Positive norms, accepted and recognized by the industrialized countries, such as the OECD Guidelines for Multinational Enterprises and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy were altogether excluded from the text.

The intention is to approve the text at the OECD conference next May. Despite its voluntary character, there is no doubt it will become the European TNCs benchmark for investments from now on, and must therefore be denounced and rejected by the Brazilian government. (Read more in the TUAC commentaries).