Trade and investment agreements come in all shapes and sizes. Trade agreements should facilitate fair and equitable trade between the parties, while investment agreements should promote international investment. Although such agreements may be concluded on an equitable basis, experience unfortunately shows that the economically stronger party usually benefits the most, that decision-making lacks transparency and that, generally speaking, agreements are often especially disadvantageous to developing countries.
The network of international agreements is large and complex. The Netherlands alone has signed more than 90 bilateral investment treaties (BITs) and is party to the trade and investment agreements concluded by the EU. For people and the environment in developing countries, current international trade and investment policy brings a lot of disadvantages.
Unlike international agreements on the environment and human rights, economic treaties and rules are not only binding but can be enforced through penalties and trade sanctions. As a consequence, agreements on protection of people and the environment can be undermined by more binding agreements on trade and investment.
Generally speaking, trade agreements and free trade by no means always promote fair and equitable trade. The economies of developing countries are often not sufficiently developed to withstand international competition. Despite international recognition that developing countries cannot always go as far as richer countries, in negotiations the rich countries do try and get the best deal possible for their own businesses and economic interests.
A special investor-state dispute settlement (ISDS) clause in investment treaties can allow investors to get around the jurisdiction of national courts. New government measures, such as changes in national environmental legislation, can lead to substantial claims from investors who think the new rules may affect their profits. If the state has to take such potential claims into account every time it introduces new measures, this acts as a powerful brake on the introduction of new legislation, even if it is in the interest of society as a whole.
Trade and investment agreements can therefore restrict a country's or society's influence on their own living environment, education and health care. Despite this, the negotiations on the agreements are often not transparent. Consequently, there is little public discussion and, frequently, even parliaments barely involved in the negotiations.
Both ENDS is calling at all policy-making levels for international economic legislation, agreements and rules to be changed so that they do not undermine human rights and the environment. We are also calling for developing countries be given certain exemptions in negotiations on trade and investment agreements, so that they have the opportunity to develop their economies. In these campaigns, we work together with civil society organisations in developing countries, which we provide with information to enable them to take action to influence their own policy-makers.