[Peace-discuss] Fwd: MAI rises from the dead - ZNet commentary

[Al Kagan]

>Delivered-To: akagan at alexia.lis.uiuc.edu
>From: Tom_Childs at douglas.bc.ca
>Date: Sun, 16 Dec 2001 02:28:36 -0800
>Subject: MAI rises from the dead - ZNet commentary
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>Today's commentary:
>http://www.zmag.org/sustainers/content/2001-12/15healy.cfm
>
>
>ZNet Commentary
>Mai Rises From The Dead December 15, 2001
>By Sean Healy
>
>In B-grade splatter films, even after the evil villain has been sliced,
>diced and dunked in lava, you just know he'll be back for the sequel.
>Apparently it's the same with corporate plots to take over the world --
>because the Multilateral Agreement on Investment, which many had thought
>dead and buried, has now risen from the grave.
>
>Dubbed the ``corporations' bill of rights'', the MAI was a plan hatched
>in secret and kept under wraps even from the parliaments of the rich
>nations which were negotiating it.
>
>When its draft text was leaked to a non-government organisation in early
>1997, it became the subject of a worldwide, and very angry, campaign.
>Given its backroom origins, it was afraid of the sunlight -- and the
>campaign was eventually enough to force those behind it, in the
>Organisation for Economic Cooperation and Development, to announce in
>late 1998 that it was being put down.
>
>>From the moment it was laid to rest, however, its architects in the
>corporate boardrooms and cabinets of the US and Europe were planning its
>resurrection -- and, sure enough, some of its body parts have since made
>their way into International Monetary Fund policy and the terms of the
>Free Trade Area of the Americas and the Asia-Pacific Economic Cooperation
>trade agreements.
>
>But its biggest step back into the land of the living came on November 14,
>when after days of tense negotiations in the World Trade Organisation's
>Qatar ministerial meeting, the WTO announced that it would launch talks on
>the terms of an eventual international agreement on investment.
>
>With negotiations due to start in the new year, the MAI is well and truly
>back.
>
>The original MAI was truly a horror story. Described by a former director-
>general of the World Trade Organisation, Renato Ruggerio, as ``the
>constitution for a single global economy'', the MAI would have given
>multinational corporations' virtual free rein to invest their capital
>where, how, when and under whatever terms they liked.
>
>Among the ``rights'' conferred on corporations by the MAI were:
>
>* the right to compete against domestic companies in all economic sectors
>without restriction (called ``national treatment'' in trade lingo);
>
>* the right to acquire any business or property in any economic sector,
>including natural resources and strategic industries such as
>communications and defence;
>
>* the right to convert currency and move money across borders without
>constraints;
>
>* the right to move production facilities without limit or penalty,
>regardless of the impacts on workers or host communities;
>
>* the freedom from conditions placed on investment (called ``performance
>requirements''), such as anti-speculation measures and rules of conduct;
>and
>
>* the right to sue governments for cash damages if an investor claims its
>rights have been violated under the agreement (called ``protection from
>expropriation'').
>
>The MAI would have severely restricted the ability of governments to set
>the framework and parameters for investment, whether long-term foreign
>direct investment (such as the establishment of factories or stores) or
>short-term speculation (such as the purchase of stocks or bonds).
>
>In particular, many of the mechanisms by which Third World governments
>seek to make foreign investment meet domestic development goals would have
>been ruled out.
>
>Laws which specify a certain amount of local content in manufactured goods
>or a certain number of managerial and technical employees in a company, for
>example, would have been outlawed, as would ``speed bump'' finance laws,
>which discourage speculation by requiring investors to hold onto financial
>assets for a minimum period of time.
>
>In its ministerial declaration, the World Trade Organisation was careful
>not to give too much, specifying only that a future framework agreement on
>investment should seek to ``secure transparent, secure and predictable
>conditions'' for investment.
>
>But one of the main backers of the MAI, the Trans-Atlantic Business
>Dialogue, a little-known but highly influential grouping of corporate
>chieftains from Europe and the US, revealed its negotiating position in a
>report published on October 29, just before the WTO ministerial.
>
>``As a point of departure'', the report stated, ``governments should launch
>negotiations in the new round to provide for: transparency, predictability
>, and stability of rules governing international investment; national
>treatment; and seek early agreement to promote enforcement of existing
>TRIMS (Agreement on Trade Related Investment Measures).''
>
>The TRIMS agreement, in force since the WTO's foundation in 1995, already
>provides some MAI-like restrictions on what ``performance requirements''
>governments can enforce.
>
>``Subsequently'', the report continues, ``WTO rules should be a basis for
>enhanced market access, protection from expropriation, and redress for the
>settlement of disputes.''
>
>Further, a close analysis of European Union documents proposing new WTO
>agreements on investment and competition policy, conducted by Ville-Veikko
>Hirvela of Friends of the Earth Finland, has revealed how MAI-style
>provisions hide behind benign-sounding phrases.
>
>Hirvela traces the linguistic contortions by which ``transparency'' becomes
>the right of corporations to sue governments for any policy which
>negatively affects their revenues.
>
>``Transparency provisions'', one EU document reveals, must include
>``procedures through which private parties can have ... guarantees of due
>process'', the ``availability of effective ... remedies'', and the
>establishment of ``authority ... with sufficient enforcement powers ... to
>provide that sanctions should be established at a sufficient level to
>constitute effective deterrence''.
>
>Similar rights to sue in the North American Free Trade Agreement have
>allowed companies to win damages from governments which close their toxic
>waste dumps, for example, or ban the sale of dangerous chemicals.
>
>The good news is that multinational corporations and rich-country
>governments are still a long way from being able to sick their resurrected
>monster onto an unsuspecting world.
>
>The commencement of WTO negotiations on investment -- and other new issues
>including competition policy, government procurement and ``trade
>facilitation'' measures -- was amongst the most hotly contested issue in
>Qatar.
>
>Many Third World countries, led by India, were opposed outright to such
>negotiations, fearing that they would result in a crippling of their
>ability to set their own terms for investment.
>
>But through a combination of bribes and blackmail, European and US
>negotiators were eventually able to overcome opposition. India was the
>last to buckle, 18 hours after the scheduled finish of the Qatar summit,
>agreeing to only abstain on the new issues, rather than oppose them.
>
>The price rich countries had to pay for getting agreement on negotiations,
>however, was a much dragged out and delayed process.
>
>Substantive negotiations on investment will not begin straight away.
>Rather, the first round of negotiations will only consider the ``scope and
>definition'' and the ``modalities'' (procedures) for a future agreement on
>investment.
>
>The outcome of these preliminary negotiations will then be presented to the
>next WTO ministerial in 2003. Only if there is an ``explicit consensus'' at
>that meeting will substantive negotiations on an agreement proceed.
>
>The capacity of business and rich-country governments to strong-arm such
>an ``explicit consensus'' out of WTO members should not be underestimated.
>
>But this breathing space means that the international social movements
>which opposed, and killed, the MAI when it first appeared now have two
>years to ready themselves to kill it again.

-- 


Al Kagan
African Studies Bibliographer and Professor of Library Administration
Africana Unit, Room 328
University of Illinois Library
1408 W. Gregory Drive
Urbana, IL 61801, USA

tel. 217-333-6519
fax. 217-333-2214
e-mail. akagan at uiuc.edu