Date: Wed, 25 Feb 1998 18:08:55 -0600 (CST)
Subject: M-NEWS: E;Le Monde Diplomatique:A DANGEROUS NEW MANIFESTO FOR GLOBAL CAPITALISM, Feb 7 (fwd)






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Date: Sat, 14 Feb 1998 08:45:04 -0600 (CST)
From: Chiapas95 <owner-chiapas95-AT-eco.utexas.edu>
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Subject: E;Le Monde Diplomatique:A DANGEROUS NEW MANIFESTO FOR GLOBAL CAPITALISM, Feb 7


This posting has been forwarded to you as a service of 
Accion Zapatista de Austin.

> http://www.monde-diplomatique.fr/md/en/1998/02/07mai.html
> 
>     ---------------------------------------------------------------
> 
>                                  LE MONDE DIPLOMATIQUE - February 1998
> 
> A dangerous new manifesto for global capitalism
> 
>      ------------------------------------------------------------
>      The Multilateral Agreement on Investment (MAI) would grant
>      imprescriptible rights to multinational corporations at the
>      expense of national governments, which would be forced to
>      defend their laws in court and pay compensation. Late in the
>      day, the public and their representatives may be beginning
>      to wake up to the dangers of the proposed treaty. Those
>      negotiating it in the Organization for Economic Cooperation
>      and Development, have kept very quiet, and earlier
>      experiences of the World Trade Organization do not augur
>      well.
> 
>      By LORI M. WALLACH *
>      ------------------------------------------------------------
> 
>      Imagine an international commercial treaty empowering
>      corporations and investors to sue governments directly for
>      cash compensation, in retaliation for almost any government
>      policy or action that undermines profits. This is not the
>      plot of a science fiction novel of future corporate
>      totalitarian rule. It is just one provision of a largely
>      unknown international commercial treaty just about to be
>      signed, called the Multilateral Agreement on Investment
>      (MAI). The director-general of the World Trade Organization,
>      Renato Ruggerio, has described the MAI quite honestly,
>      saying: "We are writing the constitution for a single global
>      economy."
> 
>      Few people even know that the MAI has been under negotiation
>      since 1995 at the Organization for Economic Cooperation and
>      Development in Paris. The goal of the MAI is to apply the
>      extreme deregulatory agenda of the WTO to the few vital
>      economic sectors not already covered by its rules. This
>      would include: where and under what terms investment in
>      manufacturing and services could be done, trade in currency
>      and other financial instruments such as stocks and bonds,
>      and ownership of land and natural resources.
> 
>      While massive shifts in the global capital flows have
>      reshaped our world in the past decades, investment issues
>      have attracted far less public, press and policy attention
>      than trade flows. Yet many multinational corporations,
>      including major financial interests, have focused on
>      investment issues. They have quietly, but aggressively,
>      pursued global investment rules to suit their narrow
>      interests and assure the consolidation and increase of their
>      hold over governments.
> 
>      Around the world, legislators, scholars, citizens and
>      activists have been largely unaware of the negotiations,
>      much less the 170-page text that the OECD reports is 90%
>      complete. Indeed, it was only in the context of a recent
>      citizens' victory in the United States against the so-called
>      fast track trade authority (1) in April 1997 that Congress
>      became aware of the MAI negotiations with the US State and
>      Treasury Departments which have been going on for three
>      years.
> 
>      This wall of silence is not unique to the United States. In
>      France, the chairman of the National Assembly's Foreign
>      Affairs Committee, Jack Lang, the person most directly
>      involved, admitted in December 1997 that "we do not know who
>      is negotiating what in the name of whom (2)". US government
>      officials denied the existence of an MAI text until an
>      embarrassing day in late January 1997, when a coalition of
>      international citizens' groups managed to get hold of a copy
>      of the text. To the US State Department's chagrin, the text
>      is now posted in full on the Internet (3).
> 
>      A review of the text shows that, like most international
>      treaties, the MAI establishes a series of rights and
>      responsibilities. But, unlike other treaties, the rights
>      granted in the treaty go only to foreign investors and
>      corporations, while the responsibilities go just to
>      governments. Additionally, in contrast to all existing
>      treaties, once governments enter into the MAI, they are
>      irrevocably bound to its terms for 20 years. More precisely,
>      if they do not express their wish to remain a party to the
>      treaty within the first five years, they are committed for
>      the remaining 15 years.
> 
>      The core chapter of the MAI is actually entitled "Investor
>      Rights". These include the absolute right to establish an
>      investment (this includes purchase of land, natural
>      resources, telecommunications and other services, and
>      currency) under the deregulated terms set forth in the
>      treaty. Governments are charged with the obligation to
>      ensure "effective enjoyment" of such investments. To
>      guarantee this, the MAI contains broad provisions providing
>      that foreign investors and corporations will be compensated
>      for any actions a government takes that undermine their
>      ability to profit from their investment. Especially when
>      these actions have the "equivalent effect" of even an
>      "indirect expropriation". What this means is that a "lost
>      opportunity to profit from a planned investment would be a
>      type of loss sufficient to give an investor standing".
> 
>      The "expropriation and compensation" rules are the MAI's
>      most dangerous provisions. They arm every foreign investor
>      or corporation with the power to challenge nearly any
>      government action or policy - from taxes to take care of
>      environmental issues and labour rules to consumer protection
>      - as a potential threat to their profits. As governments all
>      over the world are cutting welfare programmes supporting
>      poor families, how can they contemplate approving a new
>      global corporate welfare programme?
> 
>      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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