Many a debate has addressed the issues surrounding global trade, the role of the World Trade Organization (WTO), and the principles of the General Agreement on Tariffs and Trade (GATT). Less attention, however, has been given to global investment harmonization.
While global trade rules such as GATT and the WTO have been most prominent in the public eye, foreign investment has been relatively unnoticed, despite growing three times faster than trade over the last couple decades. Between 1980 and 2000, foreign investment went from 4% to 12% of GDP as a worldwide average. Unlike trade, however, there are very few international investment rules, only bilateral treaties between countries.
Because the rules vary worldwide, there is very little consistency from deal to deal, thereby putting countries into inequitable bargaining positions. Developing countries that rely on trade with developed countries are at the mercy of the stronger nation, which are in a position to make tough political and economic demands, in exchange for foreign investment. The lack of international trade and investment rules make for an incredibly uneven playing field.
Dr. Sylvia Ostry agrees. "The world trading system is in dire need of reform and the reformers – if they exist – are nowhere to be seen, either in Geneva or national capitals." The University of Toronto economics professor points out that for foreign investment to be successful from both an economic and humanitarian perspective, there must be greater transparency, an emphasis on human rights and participatory democracy, and a general toward open participation in trade policy-making processes.
Canada has a strong history of foreign investment despite ideological or political differences. Canada's bold trade missions to China during the Nixon era are notable, as is Canada's long-standing trade relations with Cuba. This insistence on a fair deal unconstrained by ideology is a model that ought to be exported beyond our borders.
While global trade rules such as GATT and the WTO have been most prominent in the public eye, foreign investment has been relatively unnoticed, despite growing three times faster than trade over the last couple decades. Between 1980 and 2000, foreign investment went from 4% to 12% of GDP as a worldwide average. Unlike trade, however, there are very few international investment rules, only bilateral treaties between countries.
Because the rules vary worldwide, there is very little consistency from deal to deal, thereby putting countries into inequitable bargaining positions. Developing countries that rely on trade with developed countries are at the mercy of the stronger nation, which are in a position to make tough political and economic demands, in exchange for foreign investment. The lack of international trade and investment rules make for an incredibly uneven playing field.
Dr. Sylvia Ostry agrees. "The world trading system is in dire need of reform and the reformers – if they exist – are nowhere to be seen, either in Geneva or national capitals." The University of Toronto economics professor points out that for foreign investment to be successful from both an economic and humanitarian perspective, there must be greater transparency, an emphasis on human rights and participatory democracy, and a general toward open participation in trade policy-making processes.
Canada has a strong history of foreign investment despite ideological or political differences. Canada's bold trade missions to China during the Nixon era are notable, as is Canada's long-standing trade relations with Cuba. This insistence on a fair deal unconstrained by ideology is a model that ought to be exported beyond our borders.
1 comments:
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Herbert Wilson.
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