Complex trade pacts promote land grabs

IPPMedia. July 01, 2013

Multiplicity of Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs) leave room for some investors to take advantage of African resources, it has been asserted.

Concern was raised during a Consumer Unity & Trust Society (CUTS) International event themed: "Towards a Multilateral Consensus on Trade and Investment: Bali and Beyond" last week in Geneva where it was that a set of principles and good practices must be adopted and adhered to in BITs FTAs to support African governments and ensure a development-friendly model is secured in the negotiations.

Tanzania's Acting Ambassador and Permanent Representative to the UN, WTO and Other International Organisations in Geneva Lucas Saronga, acknowledged the need to address investment issues within the BITs, noting that currently, they are problematic, imbalanced, and not working for sustainable development.

CUTS International Geneva Assistant Programme Officer Julien Grollier explained that reaching a multilateral consensus on a set of principles that guide trade and investment relations will help standardise future agreements and allowing African governments to negotiate better agreements that leave them with the necessary policy space to rule their own economy while still attracting investors.

"The upcoming ninth WTO Ministerial Conference to be held in Bali in December is expected to provide pointers to the future of multilateralism that some consider being in crisis," he noted.

He explained that the close interdependence between Trade and investment has been acknowledged as a potentially powerful engine for economic development. However, since investment was dropped from the WTO negotiations in 2005, these two worlds have been evolving separately.

On the trade side, multilateral discussions at the WTO have been geared towards making trade supportive to the poorest countries' economic development.

On the investment side, the international investment system has developed through thousands of bilateral investment treaties which tend to shield investors from host countries' interventions.

This system has been criticised for its 'unworkable complexity' that results in imbalanced relationships between western investors and host governments.

When discussing multilateral convergence but for environmental issues, United Nations Environment Programme (UNEP) Economic Affairs Officer Anja Von Moltke affirmed that, "…we can only adopt green growth and employment if we invest at least 2 percent of our GDPs into green economy."

"Africa should seek market access in environmentally sustainable products and supply chains and since markets of low carbon energy are projected to triple by 2020 representing a huge opportunity to switch the paradigm from brown economies" Moltke added.

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