Major powers in the World Trade Organisation (WTO) face an uphill struggle to win agreement from developing countries to start full negotiations on a global investment pact, diplomats and officials said today.
And prospects for wrapping up a deal that would set rules on treatment of foreign investors, firms and individuals, by the implicit end-2004 deadline look as remote as ever, they added.
The informants from both North and South were speaking after the first round of preliminary talks late last week showed major divergences remained between richer countries and key emerging economies on the basis for a formal negotiation.
"The old suspicions are still there," said one envoy close to the issue. "There is a strong feeling among many developing country delegations that there is nothing much in it for them".
Participants were far apart on how to define investment under an agreement, with many developing countries insisting that short-term capital flows should be excluded.
Malaysia -- whose Prime Minister Mahathir Mohamad has been an outspoken critic of international speculators -- said each government should be left to shape its own definition.
The idea of a global investment treaty that would be underpinned by the authority of the currently 144-member WTO and its more-or-less enforceable rules has been a hot topic since the body emerged from the old GATT in 1995.
But until last November's WTO ministerial conference in Qatar brought agreement on launching a new round of trade liberalisation talks, officially dubbed the Doha Development Agenda, it had been stoutly resisted by poorer states.
In Doha, where India fought almost to the last moment, the European Union and Japan which have been chief champions of the project won reluctant agreement for talks about talks from the developing world as part of the round.