79. Following the French withdrawal from the negotiations of the draft MAI, there has been a stream of press notices and parliamentary answers from DTI cataloguing the problems raised by the negotiations and heralding a "fresh start" for multilateral investment negotiations in an alternative forum.¹⁵³[157] In oral evidence to us, the Minister said that the French decision "creates an opportunity as well as the end to a process and I think we can now go forward with a clean sheet of paper and draw on the positive aspects of the negotiations".¹⁵⁴[158] The Government's ultimate goal — "a liberal rules-based system of international investment" — remains unchanged, but both the process by which this is achieved and the ancillary aims to be associated with it are to be reformed.¹⁵⁵[159] In terms of process, Mr. Wilson told us that there was a need for "a very genuine spirit of inclusiveness in negotiations and agenda-setting from the outset" and towards that end DTI hosted a seminar for NGOs and other interested parties on 26 November, the first in a series planned to consider Government policy towards a future multilateral investment agreement.¹⁵⁶[160] He has also emphasised the importance of giving developing countries a more central role in any future negotiations.¹⁵⁷[161] With regard to ancillary aims, the Government has stressed that any future multilateral investment agreement must have "full regard for environmental and social concerns".¹⁵⁸[162] We welcome the Minister's approach to a fresh set of negotiations.

80. It is now expected that, rather than present an Agreement to Ministers to be signed in May 1999, OECD negotiators will focus their efforts on delineating the principal areas of agreement and disagreement which emerged from the negotiation of the draft MAI. The OECD has agreed to "assess how to accomplish the goal we all share of developing a multilateral framework of rules for investment", but it is anticipated that negotiation of a completely new binding agreement will now begin in a different forum.¹⁵⁹[163] Several witnesses shared Cafod's view that "the forum [for future negotiations] should be one trusted by developing countries, such as UNCTAD, which has already done valuable research on the shape of a development-friendly MAI".¹⁶⁰[164] Others argued for an ad hoc body to be established under the auspices of the United Nations, akin to the UN Conference on Climate Change.¹⁶¹[165]

81. The Government's view is that "the WTO is the appropriate forum" for the negotiation of a new investment agreement and that "although UNCTAD is not a negotiating forum for rules of this kind, it...[could] add its expertise to any WTO negotiation".¹⁶²[166] The Minister stressed that "it is not a case of transferring the MAI to the WTO; it is a case of saying that the MAI has not been brought to a successful conclusion, but that there is a general desire...to have such a rules-based system for investment and, therefore, we start again in the WTO".¹⁶³[167] The WTO Trade and Investment Group, set up following the 1996 WTO Ministerial meeting, has been carrying out analytical work on the relationship between trade and investment, with a view to recommending that a mandate should be given for new negotiations of a multilateral investment agreement. The DTI will argue that "investment should be one of the issues looked at in any future 'round' of WTO negotiations".¹⁶⁴[168] We heard several arguments against the employment of the WTO as a negotiating forum for a multilateral investment agreement, including that its "explicit purpose is to hasten liberalisation (not sustainable development)"; "it characteristically refers labour and environment matters to other fora"; and it is "commonly seen as dominated by rich countries, unaccountable, inaccessible to civil society and developing countries still have little real power" within it.¹⁶⁵[169] While the WTO is probably best placed to act as the forum for the negotiation of a new multinational investment agreement, due weight should be given to reform of the Organisation's procedures and structures to ensure that developing countries have an effective voice within it.

^{1 158  54}Q123 Back

^{1 159  55}Q124 Back

^{1 160  56}Ibid; Brian Wilson opens up debate on investment agreement, DTI press notice, P/98/887, 12 Nov 98 Back

^{1 161  57}Brian Wilson reaffirms benefits of investment liberalisation for developing countries, DTI press notice, P/98/932, 24 Nov 98 Back

^{1 162  58}Brian Wilson opens up debate on investment agreement, DTI press notice, P/98/887, 12 Nov 98  Back

^{1 163  59}Chairman's Statement, OECD, 23 Oct 98; see also Ev, p35 paragraph 2, p66 paragraphs 6-8 Back

^{1 164  60}For instance, Ev, p64 Back

^{1 165  61}Q7 Back

^{1 166  62}Q125; HC Deb 17 Nov 98, cc530-1w Back

^{1 167  63}Q125; also Ev, p36 paragraph 5 Back

^{1 168  64}Ev, p37 paragraph 7 also p26 paragraph 10, p93 paragraph 18 Back

^{1 169  65}Q93; Ev, p62, p68 section 5, p73 recommendation 1.4, p85 paragraphs 3.4.1-3.4.2, p87 paragraph 5.1.3; also see HC Deb, 28 October 98, cc 272-94 Back