The liberalisation of investments is a new area brought by the Uruguay Round negotiations into the global trading system. The Agreement on Trade-Related Investment Measures (TRIMS) in the Uruguay Round accord is thus far the most significant step in the liberalisation of foreign investment conditions.

The TRIMS Agreement applies two key WTO principles to the investment policies of all member countries:

• The "national treatment" rule which requires all member countries to treat foreign enterprises under the same terms and conditions as it treats its domestic enterprises (GATT 1994, Article III)
• The reduction and eventual elimination of all quantitative restrictions on imported goods, including tariffs, non-tariff barriers, as well as other policy impediments (GATT 1994, Article IX)

The TRIMS Agreement currently allows governments to set some trade-related investment measures that would require foreign investments to fulfil certain criteria:

• Export performance
• Local content
• Product mandating or franchising
• Foreign exchange restrictions.

The requirement of local content, for example, ensures that local industries benefit as suppliers providing inputs into the production processes of foreign companies. Another opportunity to safeguard local economies rests in the government's mandate to impose export requirements and foreign exchange restrictions.

These requirements, however, are seen only as temporary measures that have to be phased out. Developed countries are expected to eliminate such requirements within two years (by 1997), whereas developing and least developed countries have five years (by 1999) and seven years (by 2001), respectively.

US analysts have pointed out that the US is aggressively seeking to reduce the use of TRIMS, even below the restrictions outlined in the TRIMS. This apparently has the support of the developed countries (except Australia), while almost all the developing countries are in favour of maintaining these regulatory TRIMS.

A challenge to the safety valves of TRIMS has arisen in the form of a proposed Multilateral Investment Agreement (MIA). The MIA has not yet been agreed upon, but is being strongly advocated by certain developed economies. As noted by Bhagirath Lal Das (former Director of UNCTAD's Trade Programme), "The EU makes no secret of its intention to seek a multilateral agreement on investment within the framework of the rights and obligations of the WTO Agreement. As far as can be made out from EU documents, the contents of the proposed multilateral investment agreement (MIA) will give full rights for foreign investors to invest and establish themselves in all sectors (excluding perhaps defence) in any WTO member, get treatment for foreign direct investments (FDI) at least on the same level as accorded to the domestic investments, and effective implementation of the obligations undertaken in the agreement. Thus the proposal aims at eliminating all flexibility which a country may have at present to permit foreign investment and allocate FDI to priority sectors; to discourage or stop altogether the flow of foreign investments in sectors where such investment is not considered desirable or appropriate; to provide special preferences for domestic investment and stipulate conditions for FDI, like ceiling on equity, restrictions on ownership and so on. Investors will thus have freedom without any responsibility, except in respect of their own profits."

As a precursor to the proposed MIA in the WTO framework, the OECD countries have been negotiating a Multilateral Agreement on Investments (MAI) among themselves. In April 1998, the OECD failed to adopt the MAI, mainly because of NGO advocacy at an international level. Despite this setback, however, some OECD countries have apparently re-intensified their efforts to promote a Multilateral Investment Agreement (MIA) within the WTO.

The proposed MIA will favour large-scale TNCs from developed countries, which will be placed on the same unrestricted competitive footing as small local companies in developing countries. There are two implications:

1. In profitable domestic consumption sectors, foreign investments may overwhelm - and in some cases may eliminate - domestic investors, especially small and medium enterprises, which are generally not as strong as their foreign counterparts.
2. Foreign interests may take over some critical sectors, such as land, minerals and forests, over which countries often exercise effective control on ownership because of social, political and strategic reasons.

This situation will impact on women significantly, especially those in developing countries:

1. Most women entrepreneurs are in small and medium enterprises (SMEs) which constitute the overwhelming majority of enterprises and employers in developing economies.
2. Women's ownership of land, property and other resources, which is already disproportionate to their numbers, will be rendered even more precarious.