Strategic Objective: To design and advocate trade and investment policies that advance sustainable development.

Achievements and Highlights

• When international negotiations on a Multilateral Agreement on Investment (MAI) were derailed in 1997, many thought that the dangers of rampant liberalization had been put to rest for a long while. Not so. Based on experience with the North American Free Trade Agreement (NAFTA), IISD began to take a close look at cases of arbitration under the rapidly-spreading Bilateral Investment Treaties (BITs). We found evidence that NGO fears about what the MAI would do to social and environmental regulation were being realized under the 2000 bilateral investment treaties. To make things worse, crucial matters of public policy were being decided behind tightly-sealed doors in international business arbitration forums, far from public scrutiny. Indeed, some of these forums are so opaque that it is not possible to find out what cases have been brought, and who the contestants are. IISD has now made the BITS a central pillar of its work on investment. With our close scrutiny of the BITs, we hope to change the world of private investment.

The IISD Trade and Investment Team has helped to build the capacity of our partners and has simplified some of the complex information emanating from international negotiations.

• For years, those promoting environment in the multilateral trading system suffered the frustration of seeing the developing countries roundly reject their agenda. For the South, the push for the environment felt like an attempt to replace with green barriers the tariffs and quotas eliminated through successive rounds of trade negotiations. Legitimate environmental priorities were inevitably perceived as rich-country interests, being imposed on countries that had other priorities. For IISD, this was a troubling situation, knowing as we do the urgency of environmental matters in developing countries, many of them affected by trade liberalization. We decided to pioneer a new approach. Working with the developing country delegations to the World Trade Organization (WTO)—and with research partners in the South—we are trying to craft an agenda that reflects developing country environmental priorities in the trade context. This "Southern Agenda on Trade and Environment" project will allow a balanced agenda to be crafted and, we hope, enable real progress on the environment to be achieved in the WTO.

• What is happening in the Doha Round of multilateral trade talks at the WTO? The answer is either simple—or immensely complicated. The negotiations, which began in early 2002, are spread across 17 negotiating groups with the WTO General Council acting as a Trade Negotiation Committee. Many items are reviewed and negotiated in more than one group. Discussions are closed to outsiders (especially to public interest NGOs). While bits and pieces of news filter out, it is very hard to unscramble them from the general background noise of the WTO beehive. IISD has tried to help. We have co-produced, with the International Centre for Trade and Sustainable Development, the Doha Round Briefing Series, which reviews what has happened in each of the negotiating groups in 2002. See http://www.iisd.org/trade/wto/doha_briefing.asp

IISD endeavours to advocate and influence the design of trade and investment policies that advance sustainable development.

• The Soviet Union was not a free-trader, and was never welcomed into the freetrade club of the General Agreement on Tariffs and Trade (GATT). As the Cold War ended, all 15 former Soviet republics started to look more closely at trade issues. About half are now card-carrying members of the WTO, and the rest are in the waiting room. This represents a major change in a short period of time. What does the change mean for sustainable development? The answer is unknown, but IISD is trying to help. We have initiated a program to help eight former Soviet republics prepare for—or adapt to—WTO membership without sacrificing sustainable development in the process. We have produced a wide range of materials in the Russian language, including the highly-regarded IISD-UNEP handbook on Environment and Trade.

• Thanks in part to IISD's efforts, the WTO is becoming more open and accessible. We have been engaging the trade community on its own terms and the effort is paying off. IISD was the first NGO ever to have one of its statements offered on the main page of WTO's Web site. We have been chosen as one of only 13 international NGOs to serve on the newly-established NGO Advisory Committee. And we are the first NGO asked to participate in teaching the regular course offered by the WTO to trade policy officials from developing countries. If our aim is to influence, this inside track will stand us in good stead.

• In collaboration with Fundación Futuro LatinoAmericano, the Ecuadorian Centre for Environmental Law and others, IISD hosted trade and environment workshops in Quito, Ecuador, parallel to the Free Trade Area of the Americas Ministerial Meeting in the fall of 2002. The three-day event generated civil society proposals on intellectual property rights and biodiversity; investment law and policy; civil society participation mechanisms; and sustainability assessment in the FTAA. The meetings culminated in the presentation of a report to the assembled 34 ministers before the FTAA Ministerial. Several workshop proposals appeared in the Ministerial Declaration.

• The second phase of the Trade Knowledge Network (TKN) kicked into high gear this past year. The TKN, which includes eight international partners and is co-managed by IISD and the International Centre for Trade and Sustainable Development, relaunched its Web site at http://www.tradeknowledgenetwork.net, conducted numerous workshops and produced important research on the relationship between trade and sustainable development. The goal of the TKN is to foster long-term capacity to address the complex issues of trade and sustainable development in partner-country research institutions, governments and the wider policy community, including business, academia, and environment and development NGOs.