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) ---------- Forwarded message ---------- Date: Sat, 14 Feb 1998 08:45:04 -0600 (CST) From: Chiapas95 <owner-chiapas95-AT-eco.utexas.edu> Reply-To: Chiapas 95 Moderators <chiapas-AT-eco.utexas.edu> 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. -- To unsubscribe from this list send a message containing the words unsubscribe chiapas95 to majordomo-AT-eco.utexas.edu. Previous messages are available from http://www.eco.utexas.edu or gopher://eco.utexas.edu.
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