Environmental Engineering Reference
In-Depth Information
patentability and long duration for patents, and it should abolish patents on life forms, a
major element distorting the patent system that has negative e
ff
ects on human health and
access to genetic resources.
Investment and trade (TRIMs)
Through the agreement on Trade-related Aspects of Investment Measures (TRIMs),
developing countries are forced to forego the use of important industrial policy instru-
ments. Policies aimed at increasing local content in value-added, or limiting imports to a
certain proportion of exports, are not allowed under the current version of TRIMs.
Thus, instead of protecting developing countries against the e
ects of market concen-
tration, TRIMs shield powerful multinational corporations against public policies in host
countries. Some of the policy instruments eliminated by TRIMs are critical in order to
obtain technological capabilities and go into higher value-added exports. They are essen-
tial to building forward and backward inter-industry linkages, and those linkages are the
carriers of economy-wide multiplier e
ff
ects (see UNCTAD, 2003b).
Chapter 11 of the North American Free Trade Agreement (NAFTA) is an example of
unprecedented rights bestowed on private
ff
rms against government decisions perceived
as detrimental to investors' rights. Firms can start a binding dispute resolution process in
special arbitration courts that can lead to compensations paid with taxpayers' money.
Panels do not o
fi
er the standard transparency guarantees of standard national courts. In
a twist of priorities, special and di
ff
ff
erential treatment is accorded to private multinational
fi
rms to the detriment of public interest in host countries. This needs to be reformed,
allowing developing countries more policy space. Also, a revision of the TRIMs is
required to incorporate the need for greater market transparency through the monitoring
of operations of multinational corporations.
Final comments
The international trading system is not leading to greater prosperity and economic justice.
Empirical evidence shows that rapid trade liberalization coexists with slower GDP growth
rates and a very large number of poor people across the world. It also coexists with rapid
and severe environmental degradation. Evidently, something is not working as standard
economic models of free trade predict (lower prices and greater welfare). The trading
system has concentrated on the elimination of barriers to trade and has ignored the task
of building up development capabilities of poor countries. In addition, trade agreements
are not focused on building a regime for stable prices and fair terms for trade.
Free trade per se should not be the top priority of the world's trading system. It is just
a tool to further integrate the world's economy into a single entity. But in this process, it
is urgent to recognize social and environmental responsibility as the central priorities of
the international agenda. Pro
t-making should stop being the leitmotif around which the
world's trading system revolves. If the world's most powerful countries do not shift the
balance towards sustainability, the negative consequences of today's irresponsibility will
return to haunt us. The question of survival of our species is involved here.
fi
Notes
1.
I wish to acknowledge support from the John D. and Catherine T. MacArthur Foundation for my research
on alternative development strategies.
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