A general note on progress made since March 1999
with a multilateral agreement on investment would be helpful,
together with a report on progress on review of the OECD Guidelines
for Multinational Enterprises and measures taken to increase awareness
of the Guidelines
Following the demise of the OECD Multilateral
Agreement on Investment negotiations in 1998 the UK and our EU
partners have discussed our approach to an international agreement
in investment. The EU position on any future multilateral investment
negotiations was agreed at the EU Council in October 1999. It
"The WTO should begin negotiations aiming
at establishing a multilateral framework of rules governing international
investment, with the objective of securing a stable and predictable
climate for foreign direct investment world-wide. Such a framework
should focus on foreign direct investment to the exclusion of
short-term capital movements, and has to ensure the right conditions
for international investment to be conducive to sustainable development,
and preserve the ability of host countries to regulate the activity
of investors on their respective territories, in accordance with
basic WTO principles, also taking into account the concerns expressed
by civil society, including those regarding investors' responsibilities.
Negotiations should address the issues of access to investment
opportunities and non-discrimination, protection of investment,
and stable and transparent business climate."
The EU position reflects our experience from
the MAI negotiations, for example by conducting negotiations in
the WTO negotiations developing countries would be involved; the
MAI used a "top down" approach (every sector was included
unless it was explicitly made an exception), but the EU proposes
that a WTO negotiation take a "bottom up" approach (participants
would make specific negotiated commitments regarding access to
sectors for investment). In addition, unlike the MAI, the WTO
would have only state to state dispute settlement procedures.
The Government continues to believe that there
is much to gain for all WTO members from the inclusion of investment
in any future WTO new Round. Following the WTO Ministerial in
Seattle the EU recognised that it needed to further explain its
position on investment. We have therefore been discussing the
EU and other countries' views informally with other WTO members,
particularly developing countries. The WTO Working Group on Trade
and Investment is also proving to be a useful forum for a discussion
of investment issues and the merits of multilateral rules.
OECD Ministers agreed the revised Guidelines
for Multinational Enterprises at the end of June 2000. The UK
was an active participant in the negotiations and will continue
to be so in their implementation. The revised Guidelines contain
significant improvements to the previous text including references
to all internationally recognised core labour standards; more
comprehensive references to companies' environmental performance;
a recommendation on human rights; and clearer guidance for OECD
National Contact Points (NCPs) setting out their roles and responsibilities
in promoting the Guidelines. Since the conclusion of the negotiations
the UK NCP has been consulting widely, including with business,
trade unions and non-governmental organisations, on how best to
promote the Guidelines in the UK. As part of this work the NCP
will be launching a website and publishing a booklet on the Guidelines
to promote awareness and also explain how guidelines-related concerns
about business behaviour can be raised with the NCP. All OECD
NCPs met in September 2000 to exchange views and experiences on
implementation and will continue to do so on a regular basis.
Ethical Trading, Sixth Report of 1998-99, HC 235:
Government Response, Seventh Special Report, HC 528
1. The Committee heard oral evidence in
February 1999 from a number of those involved in ethical trading
issues, including the Government-sponsored Ethical Trading Initiative,
as the third part of a general programme of inquiry into ethical
trade, following Reports on Strategic Export Controls and the
Multilateral Agreement on Investment.
2. It reported in March 1999, commenting
on a range of issues including the level of Government support
for ethical trading, the EU's preferential tariff scheme and labelling.
The Government's Reply, received in May 1999, was broadly supportive,
although cautious on issues such as social labelling or products
and linkage between trade policy and labour standards.
3. In advance of the Liaison Committee Report,
the Committee sought in February 2000 an update from the DTI on
progress generally and in relation to specified areas of concern.
This was provided in March 2000 and is printed below.
4. In March 2000 the European Scrutiny Committee
formally requested an opinion from the Committee on a November
1999 Commission Communication on fair trade. The Committee forwarded
an opinion in December 2000.