CAFTA PT3

An anonymous blogger wrote, "Among other corporate give-aways granted under CAFTA are "investor" protections which allow corporations to sue local governments over estimates of *future* lost profits." To bolster that claim the anonymous blogger wrote, "For example, waiting eagerly for the passage of CAFTA is Harken Energy, which has a lawsuit pending against the government of Costa Rica. Harken's proposal to drill for oil Costa Rica's rich marine eco-systems spectacularly flunked environmental review by the democratically elected government of Costa Rica. So Harken has a lawsuit against Costa Rica for $57 billion - that's right, *billion* - dollars. This is to cover the $12 million Harken already invested in the venture, as well as what it estimates are its lost future profits."

Although the person makes some good points, I would respectfully disagree. Underdeveloped countries such Costa Rica, Guatemala, Honderus, etc... stand the best chance of becoming economically developed if they allow foreign investment. Significan foreign investment will never happen as long as these countries do not play by the same rules as the rest of the world. For example, many companies were hesistant to invest in Russia when it first became free. The reason is because there were not sufficient rules or laws in place to protect investors.

Here is another part of the comment against CAFTA, "CAFTA is actually highly protectionist - that is, it protects the rights of the transnational corporations who basically wrote it, to the detriment of local democracy. For example, CAFTA seeks to protect the pharmaceutical industry from competition by legal generic brands."

This goes back to what I said about common set of rules. Of course these countries are not going to be able to rip-off the formula for new drugs and create generic drugs much cheaper. They will have to wait just like anyone else. There needs to be protections on intellectual properties and patents.

Sure all of the international laws might not be good or they might be exploited but if the alternative is the world pretending these undeveloped countries do not exist this is a much worse scenario. The comment also complains about a pending lawsuit against California by Canada. Canada feels free to invest here because they know they have some recourse if something bad happens. Just because someone sues does not gaurauntee that they will win the law suit.

The more people play that by the same rules, the more people that play! Transnational corporations will be the people investing money into underdeveloped countries to make them developed, they should have protections.