The EU is sticking to its stand that these subjects should be included inthe agenda of the forthcoming conference, while the US does not want it beso. Their final positions are expected to emerge during negotiations. Indiawill, however, resist any negotiation in this regard as it is not convincedthat multilateral rules in the area of investment would lead to an increasein investment flows.

"While India welcomes foreign investment this does not mean thatmultilateral rules in the WTO on the subject are acceptable to us", commerceand industry minister Murasoli Maran had already told European CommisssionTrade Commisssioner Lamy during the pre-Seattle meet in Lausanne last month.On the competition policy, India and other developing countries would likethe educative process on the subject to be completed by the working group ontrade and competition policy set up in the WTO.

India's opposition is notwithstanding Lamy's clarififation that EU wasproposing only a simple set of rules on investment to ensure transparency,predictability and stability which would be consistent with the country'sFDI policy.

There are several other compelling reasons why India is against amultilateral agreement on investment.

First, there are perceived inadequacies in the existing instruments thatpoint to the need for such an agreement. Secondly, developing countriesalready overloaded with commitments under the Uruguay Round cannot possiblytake on a major additional area of work and also do not have the wherewithalfor the purpose.

Thirdly,there is a possibility of cross-retalitation through the disputesettlement mechanism. Fourthly, such an agreement can negate the rights ofmember-countries to direct investment in a manner that it promotes growthwithout endangering the balance of payments position.

Finally, if discussion on the subject takes place it is necessary to examinethe movement of all factors of production,including labour, withoutrestricting discussion to just one factor, namely, capital. Moreover,discussions among the organisation for economic cooperation and developmentcountries on MAI have failed to make headway.

India feels that while competition as such may enhance economic efficiency,in practice, conditions of perfect competition are rarely available. This istrue in the case of relations among countries as well. The developingcountries are faced with low levels of technological and industrial andstructural rigidities. The distance between them and the developed countriesis very large.