File spoon-archives/marxism-international.archive/marxism-international_1998/marxism-international.9803, message 6


From: "V.ravichandran" <ravi-AT-md2.vsnl.net.in>
Subject: M-I: Dangerous manifesto for Global Capitalism Part 2
Date: Sun, 1 Mar 1998 22:42:15 +0530


This is the second part of the article on the above subject.
Dan


>      Take the case of Ethyl Corporation. This US-based company is
>      using the much more limited North American Free Trade
>      Agreement (NAFTA) expropriation provisions to sue the
>      federal government of Canada for US$251m. In April 1997 the
>      Canadian government banned a particular gasoline additive
>      called MMT - a suspected neurotoxin that damages pollution
>      systems in automobiles. Ethyl is the world's only
>      manufacturer of MMT, which is banned in some US states. The
>      US Trade Representative's office refused to pursue the case,
>      through the governmental dispute resolution system of NAFTA.
>      So Ethyl filed its own suit against the Canadian government
>      claiming that the very act of the Canadian parliament
>      debating an MMT ban constituted an expropriation of the
>      company's assets.
> 
>      Unbelievably, the case is proceeding towards a ruling. If
>      Ethyl wins, the taxpayers of Canada will owe the private
>      corporation US $251m. Such a mechanism within MAI would have
>      the power to paralyse government action to protect the
>      environment, conserve natural resources, ensure fair
>      treatment and safe conditions for workers, or shape
>      investment to suit community interests.
> 
>      Another investor right that could trigger an expropriation
>      action is "protection from strife". Under this provision,
>      governments are liable to investors if there is "civil
>      disturbance" - to say nothing of "revolution, states of
>      emergency or any other similar events". This means that
>      governments owe an obligation to foreign investors to ensure
>      there is no "strife" that could undermine their
>      profitability, such as protests, boycotts and labour
>      strikes. This is likely to encourage governments, under
>      cover of MAI rules, to restrict social freedoms.
> 
>      Meanwhile, MAI does not include an attendant set of
>      obligations or accountability for investor conduct.
>      Governments would be prohibited from treating foreign
>      investors differently from domestic investors. Whatever your
>      opinion of the concept that foreign and domestic investors
>      must always been treated the same, the MAI goes one step
>      further. Under the MAI, it is the impact of a policy - not
>      its intent or a law's textual meaning - that is considered.
>      Thus, apparently neutral laws that can be shown to have an
>      unintended discriminatory impact on foreign capital would be
>      forbidden. This means that neutral laws, placing limits on
>      the expansion of extractive industries, such as mining or
>      forestry, would be vulnerable on the grounds that, in
>      effect, they discriminate against foreign investors trying
>      to gain new access to resources, relative to domestic
>      investors who already have access.
> 
>      Similarly, policies benefiting small business throughout the
>      world, or preferential treatment aimed at fostering
>      development of certain categories of investors or
>      investments, such as the European Union's programme
>      promoting development in economically-stressed regions, can
>      come under attack if a disparate impact can be shown. There
>      is the same risk for land redistribution programmes in
>      developing countries. Under NAFTA, on which the MAI is
>      modelled, Mexico was required to change the land reform
>      provisions of its national constitution. These reforms,
>      created after the Mexican revolution, were eliminated to
>      allow US and Canadian investors to buy up large tracts of
>      land. In four years of NAFTA, this change has resulted in
>      massive dislocation of peasant farmers as agribusiness
>      companies have accumulated large plantations.
> 
>      The "national treatment" rules also cover privatisation.
>      Thus, if the French government decides to sell off the water
>      utility, bidders worldwide must be given the same access as
>      French investors, including for instance any local,
>      democratically-controlled cooperative. Ready to call Tokyo
>      when your water is cut off? How about privatisation of
>      educational services and health care?
> 
>      The MAI also includes a broad ban on "performance
>      requirements." These are measures many countries use to
>      shape investment to benefit public interests. This clause
>      could result in many environmental laws and standards being
>      challenged. In particular, the MAI could threaten the unique
>      laws of many US states that are designed to protect natural
>      resources, for example, the requirement that glass or
>      plastic containers are made from a minimum percentage of
>      recycled content and the preferential purchasing of
>      materials made with recycled content.
> 
>      The treaty's ban on performance requirements could
>      especially threaten national laws in developing countries
>      that are designed to strengthen domestic economic growth.
>      For example, laws requiring foreign investors to form
>      partnerships with local firms. The MAI also would apply the
>      principle of "Most Favoured Nation" treatment to investment
>      rules, requiring equal treatment among all foreign investors
>      and target countries. This would prevent governments from
>      distinguishing between foreign investors or foreign
>      investment targets based on countries' human rights, labour
>      or other records. It would also eliminate the sorts of
>      preferential treatment the EU now grants its former colonies
>      in Africa, the Pacific and the Caribbean through the Lome
>      Convention. If the MAI had been law in the 1980s, Nelson
>      Mandela might still be in jail! This is because the MAI
>      would require the revocation of investment boycotts or
>      restrictions - like those in force against South Africa
>      during the days of apartheid - except those defensible under
>      a narrow "essential security" exception.
> 
>      The MAI stands to transform governance around the world by
>      literally replacing many roles now performed by governments
>      with direct corporate rule. Included is the enforcement of
>      international treaties. The MAI would thus confer on private
>      investors and corporations the same rights and legal
>      standing as national governments to enforce its terms. In
>      particular, the right to take governments to court, when
>      they choose and at the tribunals of their choice. Including
>      the arbitrage panel of the International Chamber of
>      Commerce! Before such inherently biased arbiters, investors
>      are granted the power to claim compensation because they
>      have not obtained all the benefits promised under the
>      treaty.
> 
>      How are governments to be brought before such 'courts' or
>      made to pay up? The MAI text includes a provision that binds
>      governments to "unconditional consent to the submission of a
>      dispute to international arbitration". Only investors and
>      corporations, not citizens or communities, have such private
>      rights of action. The MAI also provides for state-to-state
>      dispute resolution through international tribunals modelled
>      on the WTO - with no conflict of interest or transparency
>      rules, due process guarantees or other basic judicial
>      safeguards.
> 
>      Government and industry supporters of MAI have resorted to
>      broad generalities: "Don't worry", they argue, "there's
>      nothing new in this treaty. It's just about 'rationalising'
>      existing investment practices". Yet, the MAI, like a
>      political Dracula, simply cannot survive sunlight. The
>      sudden revelation of the MAI text in Canada ignited
>      political turmoil greater than that of the decade-old fight
>      against free trade with the US. New Zealand's parliament
>      exploded into fury against the government when word leaked
>      out. In the US, the MAI was attacked on the floor of
>      Congress.
> 
>      Ironically, the constituency that should be most up in arms,
>      the world's labour movements, which are represented at the
>      heart of the OECD, have simply called for a "social charter"
>      to be added to the treaty, rather than its underlying rules
>      to be replaced. This position is dismissed by environmental,
>      human rights and consumer experts - and now a growing number
>      of US unions - who consider the suggestion to be like
>      putting icing on a cake laced with strychnine.








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