Date: Sat, 2 May 1998 11:47:18 -0500 (CDT)
From: "Harry M. Cleaver" <hmcleave-AT-eco.utexas.edu>
Subject: AUT: Financial Times (London) on MAI & Internet (fwd)



---------- Forwarded message ----------
Date: Fri, 1 May 1998 19:01:59 -0400
From: Sam Lanfranco <lanfran-AT-YORKU.CA>
Reply-To: Forum on Labor in the Global Economy <LABOR-L-AT-YORKU.CA>
To: LABOR-L-AT-YORKU.CA
Subject: Financial Times (London) on MAI & Internet

Subject:
        FT: 'NGOs have tasted blood'
   Date:
        Fri, 1 May 1998 15:07:05 +0200 (MET DST)
   From:
        paxaran-AT-antenna.nl (Olivier Hoedeman)
     To:
        (Recipient list suppressed)



sorry for cross-posting

 =================================Financial Times   THURSDAY APRIL 30 1998

   Network guerrillas

   How the growing power of lobby groups and their use the Internet is
   changing the nature of international economic negotiations. By Guy de
   Jonquieres

   There is a memorable scene in the film Butch Cassidy and the Sundance
   Kid when the outlaw heroes are hounded for days by a bunch of armed
   men on horseback. After failing to shake off their mysterious
   pursuers, one of the hunted men asks despairingly: "Who are these
   guys?"

   Similar fear and bewilderment have seized governments of
   industrialised countries as they struggle to draft rules for the
   treatment of foreign investment. To their consternation, their
efforts
   have been ambushed by a horde of vigilantes whose motives and methods
   are only dimly understood in most national capitals.

   This week the horde claimed its first success and some think it could
   fundamentally alter the way international economic agreements are
   negotiated.

   The target of their attacks was the Multilateral Agreement on
   Investment (MAI) being negotiated at the Organisation for Economic
   Co-operation and Development, the attackers a loose coalition of
   non-government organisations (NGOs) from across the political
   spectrum. They included trade unions, environmental and human rights
   lobbyists and pressure groups opposed to globalisation.

   The opponents' decisive weapon is the internet. Operating from around
   the world via web sites, they have condemned the proposed agreement
as
   a secret conspiracy to ensure global domination by multinational
   companies, and mobilised an international movement of grass-roots
   resistance.

   This week, they drew blood. Unnerved by the campaign against the MAI,
   OECD ministers interrupted the negotiations for six months in a
   belated effort to rally support for the proposed agreement among
   politicians and voters at home.

   Does it matter? Postponing the agreement may make little difference
   for the maligned MAI is a paper tiger. Trumpeted as a historic
   initiative in 1995, flawed preparatory work and bitter disagreements
   among negotiators have thwarted its main aims anyway, such as
relaxing
   national investment restrictions.

   Nonetheless, the unexpected success of the MAI's detractors in
winning
   the public relations battle and placing governments on the defensive
   has set alarm bells ringing. "This episode is a turning point," says
a
   veteran trade diplomat. "It means we have to rethink our approach to
   international economic and trade negotiations."

   The central lesson is that the growing demands for greater openness
   and accountability that many governments face at home are spilling
   over into the international arena. That makes it harder for
   negotiators to do deals behind closed doors and submit them for
   rubber-stamping by parliaments. Instead, they face pressure to gain
   wider popular legitimacy for their actions by explaining and
defending
   them in public.

   There are signs these trends could affect many international economic
   agreements, including those involving the World Bank and
International
   Monetary Fund. But nowhere are the lessons of the MAI affair likely
to
   be studied more intently than at the World Trade Organisation. Born
   out of the General Agreement on Tariffs and Trade (a highly technical
   body), the WTO is emerging as the pre-eminent forum for global
   economic rule-making.

   Its task is complicated by three closely-related trends:
     * The threat of "globalisation backlash", as voters in the US and
       many other countries blame social and economic insecurity on free
       trade and open markets.

     * The extension of trade liberalisation beyond border barriers,
such
       as tariffs and quotas, into areas that were until recently
       regarded as national policy preserves.

   As a result, trade liberalisation impinges far more directly than
ever
   on ordinary people's lives, and risks stirring up popular resentment
   when it conflicts with sensitivities over issues such as
environmental
   and food safety standards.
     * The growing reach of the WTO's disputes settlement procedures.
       Critics allege that the body's increased power to enforce world
       trade law puts countries' sovereignty at the mercy of a judicial
       process that lies beyond national control. Defenders of the WTO
       reject such criticisms as inaccurate and ill-informed. But some
       admit the organisation and its members are paying the price for
       acting with unnecessary secrecy.

   The system is already fraying at the edges, partly under pressure
from
   its own members. Governments involved in controversial trade dispute
   cases regularly "leak" confidential interim rulings by WTO panels.
WTO
   chief Renato Ruggiero says that unless disclosure rules are reformed,
   the organisation's credibility will be undermined.

   A US-led debate is under way on opening the doors wider. The WTO has
   equipped its new council chamber with a public gallery and invited
   representatives of more than 150 NGOs to its ministerial meeting next
   month. Some diplomats favour making disputes panel hearings public.

   However, it is uncertain whether such moves will be enough to satisfy
   the critics. Most officials admit they are in a dilemma over how to
   deal with the NGOs' demands, and how to assess their political
   strength.

   One problem is deciding which organisations to listen to, and whom
   they represent. Governments agree that many such groups hold views
   that reflect a broad swathe of public opinion. But they also believe
   much pressure is exercised by fringe movements that espouse extreme
   positions, with little public support. The trouble is, as officials
   concede, that good organisation and strong finances enable such
groups
   to wield much influence with the media and members of national
   parliaments.

   The desire to neutralise the impact of such lobbying may push
   governments to work more energetically to drum up business support
for
   liberalisation agreements. The OECD's failure to do so in the case of
   the MAI is an important reason for its problems.

   Business lobbies which trade negotiators have traditionally suspected
   of being mainly interested in preserving protection are becoming more
   active as proponents of free trade. Strong support from industry
   leaders on both sides of the Atlantic played a big role in WTO
   agreements last year to eliminate information technology tariffs and
   open global financial services markets to more competition.

   Nonetheless, striking the balance between wider public consultation
   and capitulation to lobby groups will not be easy. Some diplomats
fear
   that if they concede too much they will be unable to resist demands
   for direct participation by lobby groups in WTO decisions which would
   violate one of the body's central principles.

   "This is the place where governments collude in private against their
   domestic pressure groups," says a former WTO official. "Allowing NGOs
   in could open the doors to European farmers and all kinds of
lobbyists
   opposed to free trade."

   He and other trade experts fear the result would be to paralyse the
   WTO's effectiveness as an engine for freeing trade and turn it into a
   happy hunting ground for special interests.

   However, free trade advocates are aware that the MAI affair is likely
   to mean they will have to fight harder to keep the WTO's mission
   intact. "The NGOs have tasted blood," says one. "They'll be back for
   more."

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