n the runup to Seattle, the European Commission coordinated its campaign for investment negotiations in the WTO with the Investment Network, an "informal network" of business representatives initiated by the EC in 1998. [1] Two detailed surveys were carried out. One among a group of 10,000 EU companies to identify business expectations of "what international investment rules should contain." The minutes of its meetings with the Investment Network (now on the EC's trade website) leave little doubt about what steers the Commission in its push for WTO investment negotiations.

To "assist the Commission in tentatively identifying business priorities" for a WTO investment agreement, the Commission, in the Spring of 1999, first carried out a questionnaire among the 50 or so large transnational corporations in the Investment Network. [2] The results of the questionnaire were discussed in detail with the Investment Network at a meeting on June 23rd. The EC concluded from the business replies that in comparison with the OECD's stranded Multilateral Agreement on Investment (MAI), the aims of a WTO investment agreement would be less ambitious. [3] The EC distilled from the questionnaire that accelerated investment liberalisation and removing performance requirements (conditions on employing locals, transferring technology, environmental regulations, etc.), key elements of the MAI, were no longer such urgent priorities. [4]

During the discussion, members of the Investment Network, however, distanced themselves from several of the EC's interpretations and argued for WTO rules with clear MAI features. "Limitations to the free movement of capital" (such as transfer of profits) and "discrimination and instability of rules" were considered problematic, as were limits to foreign ownership and screening of new investors. [5] Also the EC's conclusion that "labour and environment standards are not a key factor in a company's decision to invest" was questioned.

Apart from revealing the EC's eagerness to let business priorities define its WTO strategies, the minutes also make clear how the Commission sees business as a key campaign ally. At the Investment Network meeting last October, the EC complained about the continued lack of US government support for WTO investment negotiations. As this 'problem' is mainly due to lack of enthusiasm by US business, the EC "pointed to the vital need for increased informal contacts between the EU and US business in order to push for an investment agenda in Seattle." [6] The Commission also briefed the Investment Network on the latest developments in the OECD's review of its "Guidelines on Multinational Corporations". The Commission wants to keep these guidelines voluntary, but seems to believe that the process of revising them can win over some of the NGOs that opposed that MAI. [7]

Apart from the questionnaire within the Investment Network, the EC has also commissioned a much bigger so-called 'business survey' among 10,000 companies. The aim of the business survey is to "determine the hurdles hindering European companies' investments outside the EU and to gather their expectations in terms of what international investment rules should contain." [8] The results of this survey, carried about by the consultancy SOFRES, were to be ready just before the Seattle Ministerial, but have still not been released. [9]

It is high time for Commissioner Lamy to explain how the reality of EC-initiated business groupings and expensive surveys for identifying corporate priorities fits with the lofty claims of a WTO Millennium Round being about 'sustainable development' and the concerns of the worlds' poorest.

1. For background information, see CEObserver, Issue 4, "The WTO Millennium Bug: TNC Control over Global Trade Politics", CEO, July 1999. | Back to Text |

2. The two last meetings of the Investment Network before the Seattle Ministerial Conference (23 June and 25 October 1999) were attended by between 25 and 35 representatives of major EU based corporations (including BP, Elf Aquitaine, ICI, Pechiney, SmithKline Beecham and Unilever). A post-Seattle meeting of the Investment Network was announced for early 2000, but does not seem to have taken place yet.

The minutes were only put on the website after repeated critique from CEO and others: the EC consultations with NGOs feature prominently on the site, whereas the parallel process of meetings with the Investment Network, the European Services Forum and other corporate structures was largely invisible. The documents related to the Investment Network are hard to find on the website, but they are worth looking for. 

Note that the minutes are not logically placed in the section dealing with the "Millennium Round", but elsewhere on the website. Visitors of the website looking for information on how the EC is preparing its WTO agenda will, at the time of this writing, still only see information about meetings with NGOs. | Back to Text |

3. "Short Minutes of the 4th Investment network meeting", Brussels, 5 October 1999. | Back to Text |

4. While the aims would be "very different than those of the draft MAI," the essential target would however still be to safeguard and expand investors' 'rights'. Discussion Paper "Preliminary results of the Business Investment Network questionnaire", EC, Brussels 23 June 1999. | Back to Text |

5. Concerning investment liberalisation, the EC concluded that the wave of economic deregulation has already done away with almost all barriers for foreign investors. As for performance requirements, the WTO TRIMs agreement already limits the use of such measures and "governments are gradually dismantling" these measures anyhow, "in their efforts to attract FDI." | Back to Text |

6. "Civil society Consultation on Trade and Investment: Report," Brussels, 23 June 1999. | Back to Text |

7. UNICE replied that parts of US business were already supporting investment talks to start in Seattle. This discussion followed after the EC had briefed business on its meetings with the negotiators from the rest of the Quad countries (US, Japan and Canada). "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. | Back to Text |

8. The Commission stressed the role they see for the revised guidelines "in the prospect of establishing binding rules on investment in the WTO." Symptomatically, UNICE used the occasion to protest against one OECD country having proposed to move away from the purely non-binding status of the guidelines, which could result in "companies being dragged in the future in front of quasi-juridical panels of the OECD." This resistance against binding guidelines or a 'naming and shaming' approach stands in stark contrast to the lofty claims about their social and environmental behaviour made by UNICE and European TNCs in general. "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. | Back to Text |

9. "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. | Back to Text |

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