SECTION 9: DEVELOPING STRATEGIES AND TOOLS - REGIONAL LEVEL
MULTILATERAL TRADE AND INVESTMENT
AGREEMENTS AND ESC RIGHTS
The Purpose of Module 26
The purpose of this module is to provide an overview of multilateral trade and investment agreements as they relate to the enjoyment of ESC rights.
At the dawn of the twenty-first century, economic globalization  dominates the world stage. Its manifestations are all around us and include its manifold failures. The iniquitous outcomes of economic globalization have been confirmed in numerous UN reports. Even international economic policy forums now recognize that the so-called "trickle down effect, for long the social justification for economic liberalization, is not occurring. Studies such as the UN Conference on Trade and Development (UNCTAD) Trade and Development Report 1997 and the UN Development Programme (UNDP) Human Development Report 1997 (HDR 1997) convincingly show that the opposite is true. UNCTAD describes how since the early 1980s the world economy has been characterized by growing inequality, both among and within countries; how income gaps between North and South continue to widen; and how the income share of the richest 20 percent has risen almost everywhere, while that of both the poorest 20 percent and the middle class has fallen.  The HDR 1997 similarly documents how, although want has been dramatically reduced in many parts of the world, one-quarter of the human race remains in severe poverty. It shows that the UNDPs human development index (HDI) declined in more than thirty countries-more than in any year since the HDR was first issued in 1990-and that economic globalization had indeed helped to reduce poverty in some of the largest and strongest developing economies, but had produced a widening gap between winners and losers among and within countries. 
The United States, whose ideology created and sustains the global architecture on which economic globalization depends, ironically experienced its own domestic dispossession and poverty.  Poverty is now more widespread and extreme in the United States than in any other industrialized country. Powerful voices are now emerging within the nation to question the basis of economic globalization as we know it; these include such figures as the chief economist of the World Bank, Joseph Stiglitz. 
As if the adverse effects of the liberalization of trade and investment were not enough, attempts are being made to create conditions that will allow for unfettered capital flows. The trend began with the establishment of global deregulated markets in the 1980s and 1990s. While massively increased financial mobility has become a primary danger to the health of national economies-as was demonstrated by the crisis in Southeast Asia in the late 1990s-the exponential growth and current scale of such financial flows is astounding. 
The years 1997 and 1998 witnessed an attempt to adopt a Multilateral Agree-ment on Investment (MAI). This was being negotiated at the Organization for Economic Cooperation and Deve-lopment (OECD), the international club of the worlds twenty-nine richest countries. If adopted, the MAI would have contributed a significant chapter in what has been called the "constitution of a single global economy, or "a bill of rights and freedoms for transnational corpora-tions . . . a declaration of corporate rule. Until February 1997, when a draft was leaked, the agreement had for the most part been negotiated in secret and was driven by the ag-gressive advocacy of the International Chamber of Commerce, the US Coun-cil on International Business, and other corporate-backed groups. Essentially, the MAI sought to complete the economic liberalization agenda, favor-ing the rights of transnational investors and corporations over the rights of workers, consumers, communities and the environment.
In December 1998, under intense pressure from civil society organizations (CSOs),  and in response to the withdrawal of France from the negotiations, the OECD abandoned the MAI. (described below). However, increased freedom for investment is very much on the agenda at various global and regional forums. Provisions that made the MAI notorious with environmental, human rights,  and development NGOs are cropping up at the World Trade Organization (WTO), the International Monetary Fund (IMF), the Free Trade Agreement of the Americas (FTAA), and elsewhere. CSOs thus need to be more, not less, vigilant.
It is against the background of attempts to liberalize finance, trade and investment still further that activists contemplate perhaps the greatest challenge to social action: how to sustain countervailing forces that challenge, expose, demystify and discredit the lure of economic globalization and blunt the power of those who are devising ways to push the world closer to the edge of economic and social disaster-processes already evident with the recent crises in Southeast Asia, Russia and Brazil.
The pressing need for social actors and activists is to grapple with the worlds economic systems, at whatever level possible-from gathering information and gaining understanding to carrying out research on the impacts of globalization; from advocacy work aimed at reform of global institutions to staking claims to space during international and regional negotiations on economic treaties and demanding an increased role for the United Nations.
The onus is on CSOs to push at all levels for the implementation of human rights, in particular ESC rights. Ironically, the catalyst for doing so is to be found in the very processes that have been produced by economic globalization. Ever more extensive transnational alliances are needed to restore what has been destroyed in recent decades. An inability to understand the many dimensions, some quite technical, of globalization, a reluctance to lock horns with the institutions that spearhead it, and a focus only on local-level action will serve to marginalize CSOs, and to consign many millions of people to further exclusion and poverty.
The Relevance of the Human Rights Approach
While ever more people and institutions now acknowledge problems with the economic liberalization model, what is overlooked is the framework within which economic policy needs to be formulated for the benefit of humankind. The existing international human rights treaties and declarations,  and UN mechanisms monitoring compliance with these instruments, provide such a framework and confer upon states the legal obligations to protect, promote, and fulfill human rights. Together, these instruments form useful points of departure in articulating and putting into practice collective rights, such as the right to development and to a clean environment. Certain instruments also promote the rights of specific population groups such as indigenous and tribal peoples, minorities, and disabled persons.  Collective rights are emerging as an important area of articulation and action as calls are heard for rights such as clean drinking water, or for the rights of women, indigenous peoples and peasant farmers.
Underpinning the human rights instruments are basic principles of nondiscrimination, equality, self-determination and the right to political participation. Human rights provide the perspective, the context and the substance (through the entitlements contained in numerous instruments) to realize sustainable development and social justice for all. Viewed in such a light, the realization of human rights for every woman, man and child is the primary system through which international investment, finance and trade regimes can be held accountable. The policies, programs and instruments emanating from economic globalization affect people at the local level, both directly through the acquisition of natural resources and indirectly through the influencing of national policies that undermine the capacity of people and communities, especially the marginalized, to control their own space and resources. Such impacts are clearly a violation of internationally accepted obligations under human rights treaties.
The dangers inherent in emerging investment agreements are well expressed by OXFAM in its 1998 update on the MAI.  OXFAMs reservations indicate the serious threat that is posed by the principles and provisions in emerging regional and international investment agreements to basic human rights principles such as the progressive realization of ESC rights. OXFAMs objections to the MAI are summarized as follows: 
The International NGO Committee on Human Rights in Trade and Investment (described below) has identified four fundamental human rights that are under threat. The committee has proposed a useful framework to explain a human rights approach and has offered clear directions for gaining and retaining human rights: 
The new social movements that have adopted this holistic approach have done much not only to strengthen the pro-environment lobby and womens movements, but also to demonstrate the imperative of viewing human rights and development as complementary and mutually reinforcing trajectories in achieving social justice for all.
In addition to the OXFAM report and the proposals by the NGO Committee just mentioned, there are also valuable insights and directions offered by the resolutions emanating from the UNs human rights program.  Take, for example, the resolution adopted on 20 August 1998 by the UN Sub-Commission for the Prevention of Discrimination and the Protection of Minorities entitled: "Human rights as the primary objective of trade, investment, and financial policy. In this resolution the sub-commission emphasized that the realization of the human rights and fundamental freedoms is the "first and most fundamental responsibility and objective of States in all areas of governance and development.  This phrase reaffirms language adopted by the worlds governments in the Declaration and Plan of Action from the 1993 World Conference on Human Rights.  The sub-commission also expressed concern about the human rights implications of the MAI, "and particularly about the extent to which the Agreement might limit the capacity of States to take proactive steps to ensure the enjoyment of economic, social and cultural rights by all people, creating benefits for a small privileged minority at the expense of an increasingly disenfranchized majority. The 1998 resolution also called for a working paper on trade, investment and human rights. 
Building on its 1998 groundbreaking initiative, the sub-commission passed a resolution at its 1999 session titled "Trade liberalization and its impact on human rights.18 In this resolution the sub-commission addressed itself directly to the WTO, calling for steps to be taken "to ensure that human rights principles and obligations are fully integrated in future negotiations in the WTO.
It also grappled with the problematic issue of trade sanctions to enforce human rights. Many developing countries fear, and with considerable justification, that linking trade with human rights (including labor rights) or environmental protection would provide fertile ground for quasi-protectionist measures against developing country exports. The misuse, or the perceived misuse, of human rights objectives as pretexts for disguised protectionist measures only serves to bring human rights into disrepute in the target country. Recognizing this difficulty, the sub-commission declared, "Sanctions and negative conditionalities which directly or indirectly affect trade are not appropriate ways of promoting the integration of human rights in international economic policy and practice.
The apparently unqualified rejection of trade sanctions by the sub-commission does not mean that trade sanctions for human rights abuses should never be considered. However, such sanctions are certainly not conducive to a holistic integration of human rights principles into trade policy or to promoting the adoption of a human rights framework for the processes of international economic policy formulation.
In its 1999 session, the sub-commission also established a Working Group (WG) on transnational corporations (TNCs) and human rights. Among other initiatives, the WG is renewing earlier efforts to formulate a human rights legal framework for TNCs. The sub-commission has also appointed a Special Rapporteur on globalization and human rights. Moreover, the sub-commission intends to consider the promotion and realization of economic, social and cultural rights within the context of economic globalization in an interdisciplinary social forum format.
In the days immediately prior to the WTO meeting in Seattle in 1999, the CESCR issued a statement to the WTO and its members.19 Over 100 of the 135 members of the WTO have ratified this International Covenant. In its statement, widely reported in Seattle, the committee urged members of the WTO to ensure that the organization plays "a positive and constructive role in relation to human rights. Trade liberalization, said the committee, does not necessarily create and lead to a favorable environment for the realization of ESC rights. Moreover, trade liberalization "must be understood as a means, not an end. The end which trade liberalization should serve is the objective of human well-being to which the international human rights instruments give legal expression. The committee said that it had become increasingly aware of "the extent to which international economic policies and practices affect the ability of States to fulfil their treaty obligations in the area of ESC rights. It called for a review of the full range of international trade and investment policies and rules, to ensure that these are consistent with existing treaties, legislation and policies designed to protect and promote all human rights. "Such a review should address as a matter of highest priority the impact of WTO policies on the most vulnerable sectors of society as well as on the environment.
1. The term "economic globalization, as used in this module, encompasses institutional processes that deal with trade, investment, finance, intellectual property, structural adjustment and debt within an ideology of economic liberalization.
2. United Nations Conference on Trade and Development, Trade and Development Report 1997 (Geneva: UNCTAD, 1997).
3. United Nations Development Program, Human Development Report 1997, (New York: Oxford University Press, 1997).
4. 63.8 million people (one in four US residents) live below the poverty line, and there are two million homeless people, of whom 500,000 are children. From 1979 to 1994, real family income for the top tenth of the US population increased by 83 percent, while the bottom tenth lost 14 percent, and the next tenth lost 5 percent (figures taken from the Congressional Hearing on hunger and homelessness in the US, 23 September 1998).
5. See, for example, Dr. Joseph Stiglitz, Ninth Prebisch Lecture at UNCTAD, 19 November 1998, Geneva. Talking of the "Washington Consensus (on globalization), Stiglitz stated that it had failed to foster development because it "all too often confused means with ends-taking means such as privatisation, getting the price right and trade liberalization as ends in themselves. His alternative development paradigm is, however, disappointing, because it falls short of recognizing the valuable process already in place in the form of numerous CSO and NGO initiatives and through the international instruments on human rights, environment and development. The text of Dr. Stiglitzs talk is available on the World Banks website: http://www.worldbank.org
6. In 1980, foreign exchange trading alone was US$80 billion on average per day, and the ratio of such trading to world trade was about 10:1. In 1995, daily trading averaged US$1260 billion, and the ratio to world trade was nearly 70:1. This is equal to the entire worlds official gold and foreign exchange reserves.
7. In this module, the term "CSOs includes community-based organizations, social movements, issue-based campaigns, and NGOs. For clarity, the term "NGO is sometimes used to connote an intermediary support organization.
8. The human rights community was slow to respond to this threat emanating from the OECD. See Miloon Kothari and Tara Krause, "Human Rights or Corporate Rights? The MAI Challenge, in Human Rights Tribune, 5, nos. 1-2 (April 1998).
9. See, in particular, International Covenant on Civil and Political Rights, adopted 16 Dec. 1996, GA Res. 2200 (XXI), 21 UN GAOR Supp. (No. 16) at 52, UN Doc. A/6316 (1966), 999 UNTS 171, entered into force 23 Mar. 1976; International Covenant on Economic, Social and Cultural Rights, adopted 16 Dec. 1966, G.A Res. 2200 (XXI), 21 UN GAOR Supp. (No. 16) at 49, UN Doc. A/6316 (1966), 993 UNTS 3, entered into force 3 Jan. 1976; Convention on the Elimination of All Forms of Discrimination against Women, adopted 18 Dec. 1979, GA Res. 34/180, 34 UN GAOR Supp. (No. 46), UN Doc. A/34/46 (1980), 1249 UNTS 13, entered into force 3 Sept. 1981, reprinted in 19 ILM 33 (1980) (hereafter cited as CEDAW); Convention on the Rights of the Child, adopted 20 Nov. 1989, GA Res. 44/25, 44 UN GAOR Supp. (No. 49) at 165, UN Doc. A/44/736 (1989), reprinted in 28 ILM 1448 (1989).
10. See, in particular, Declaration on the Right to Development, GA Res. 41/128, Annex, 41 UN GAOR Supp. (No. 53) at 186, UN Doc. A/41/53 (1986); Declaration on Social Progress and Development, GA Res. 2542 (XXIV), 24 UN GAOR Supp. (No. 30) at 49, UN Doc. A/7630 (1969); Charter of Economic Rights and Duties of States, GA Res. 3281 (XXIX), UN Doc. A/RES/29/3281, Annex. (1974); see also CEDAW, note 9 above (promoting the collective human rights of women); see also, e.g., African Charter of Human and Peoples; Rights, adopted 27 June 1981, OAU Doc. CAB/LEG/67/3/Rev.5, reprinted in 21 ILM 58 (1981), entered into force 21 Oct. 1986 (for an example of how regional instruments address the issue of collective rights).
11. See OXFAM GB Update on the MAI (Multilateral Agreement on Investment), December 1998.
12. OXFAMs objections can be found on: www.oxfam.org.uk/policy/papers/mai_update/mai_update.htm
13. See Policy Statement of the International NGO Committee on Human Rights in Trade and Investment, Investment, Trade and Finance-the Human Rights Framework: Focusing on the Multilateral Agreement on Investment (MAI), September 1998.
14. For a discussion on the relevance of the emerging agenda on globalization at the Sub-Commission on the Promotion and Protection of Human Rights, see Miloon Kothari and Peter Prove, "The Sub-Commission and Globalisation: Guest Editorial, in Human Rights Tribune 5, no. 4 (September 1998).
15. UN Sub-Commission resolution 1998/12, adopted without a vote on 20 August 1998. UN Doc. E/CN.4/Sub.2/RES/1998/12 (1998)
16. "Human rights and fundamental freedoms are the birthright of all human beings; their protection and promotion is the first responsibility of Governments (Para. 1 of the Vienna Declaration and Programme of Action, adopted at the Vienna World Conference on Human Rights, June 1993).
17. Sub-Commission on the Promotion and Protection of Human Rights, Human rights as the primary objective of international trade, investment and finance policy and practice, Working paper submitted by J. Oloka-Onyango and Deepika Udagama, in accordance with Sub-Commission Resolution 1998/12, UN Doc. E/CN.4/Sub.2/1999/11 (17 June 1999).
18. See Sub-Commission Resolution 1999/30, adopted on 26 August 1999. UN Doc. E/CN.4/Sub.2/RES/1999/9 (1999).