Nexus - 0503 - New Times Magazine-pages

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THE WINNERS AND LOSERS The agreement will grant TNCs extensive new powers while at the same time denying governments the right to control foreign direct investment in their countries. The rules and regulations which hinder foreign investment and will be dismantled under the MAT are often those that protect workers and jobs, public welfare, domestic businesses, the environment and culture. By subverting national and local priorities to the needs of foreign investors, the MAI poses a dangerous threat to democratic political processes. The impacts would be the most devastating on poorer countries which would have no chance to build up a balanced economy or break their reliance upon commodity export and resource extrac- tion in the service of industrialised countries and their corpora- tions. Consequences within OECD countries would be different but also dramatic. of a treaty that would increase competitive pressure on wages and policies, facilitate relocations and ban many of the policies des- perately needed to strengthen local economies and reduce general dependency on transnational corporations. MAL are often those that protect workers and jobs, public welfare, OECD: MORE THAN JUST A THINK-TANK domestic businesses, the environment and culture. By subverting The Organization for Economic Cooperation and Development national and local priorities to the needs of foreign investors, the is an intergovernmental organisation with 29 member countries. MAI poses a dangerous threat to democratic political processes. More than simply a regional body, the OECD defines itself as an The impacts would be the most devastating on poorer countries "homogeneous entity" within which member countries share simi- which would have no chance to build up a balanced economy or lar economic and political ideologies.* Members include all EU break their reliance upon commodity export and resource extrac- states plus Australia, Canada, the Czech Republic, Hungary, tion in the service of industrialised countries and their corpora- Iceland, Japan, Mexico, New Zealand, Norway, Poland, South tions. Consequences within OECD countries would be different Korea, Switzerland, Turkey and the United States of America. but also dramatic. OECD decision-making happens within a "system of consen- sus-building through peer pressure"’ Essentially, this means that THIRD WORLD UNDER SIEGE member countries ensure that other members stay in line with cur- Third World opposition to the MAI and other attempts to rent OECD policy and direction. Much of this policy and direc- impose MAI-style policies has been considerable. Simultaneous tion is the product of various committees which seek to "knit a to the launching of OECD MAI negotiations, the EU-led attempt web of compatible policies and practices across countries that are at a flying start for a MAI-clone treaty, called MIA (Multilateral —_ part of an ever more globalised world". Investment Agreement), within the World Trade Organization Although often described as an intergovernmental think-tank, was obstructed by countries like India and Malaysia. They could the OECD is more than that. Member countries send experts and not, however, prevent the creation of a WTO working group on __ policy-makers to join specialised groups and committees on investment—in which the EU and approximately 200 subject areas. others continue to push for the com- Such committee discussions often mencement of MIA negotiations. result in formal treaties and agree- The OECD countries have adopt- ments in areas such as international ed a multifaceted strategy to reach By subverting national and local investment, capital movements and their aim of investment deregulation priorities to the needs of foreign environmental policy. in the South. This strategy includes tempting Third World countries to investors, the MAI poses a MAKE-UP OF THE MAI sign on to the MAI, keeping an dangerous threat to democratic ; In sum, the MAI would require investment treaty on the burner in — countries to open their economies the WTO, and using other interna- political processes. wide to any interested investor—and tional institutions like the United Nations Commission on Trade and any TNC’ complaints about unfavourable treatment by the host Development (UNCTAD) and the country would be judged in unac- International Monetary Fund (IMF) countable international courts. The to further their objectives. main elements of the agreement are as follows: The most recent offensive for investment deregulation was * The MAI would encompass an extremely broad range of announced by EU Commissioner Sir Leon Brittan when, in early investments. Not only direct corporate investment but stocks, February of this year, he informed the world that negotiations on a bonds, loans, debt shares, intellectual property rights, leases, trans-Atlantic free trade zone involving the EU and the US might — mortgages and concessions on land and natural resources would be launched in May 1998. be covered. The health, education, communications, cultural, banking and construction sectors would all be fair game for for- THE RACE AGAINST TIME eign investors. In fact, the only exempted sectors would be After a smooth first year and a half of negotiations, the MAI defence and police. entered a far rockier phase in early 1997. Problems arose due to * The MAT is based on the principles of "national treatment" demands by OECD countries for an increasing number of reserva- and "most favoured nation" (MEN). In plain language, this would tions and sectoral carve-outs, and also with the high-speed emer- require governments to treat foreign investors as well as or better gence of anti-MAI campaigns in one OECD country after another. than domestic investors and thus would automatically favour Although serious preparations for the MAI had already begun transnational investment over that of smaller domestic companies. in 1991, non-governmental organisations (NGOs) representing Restrictions placed by countries on foreign investment in sensitive environment, development, women and other sectors which were sectors—for example, publishing in Malaysia, Indonesia and sure to be impacted by the MAI were not consulted until October Venezuela; forestry, fishing, mining and agriculture in a number 1997. of countries; toxic waste in Colombia and highly polluting indus- The negotiators are now embroiled in a race against time in try in Taiwan—would be prohibited. order to avoid another postponement of negotiation deadlines—a * The MAI would do away with so-called performance require- delay that might mean the kiss of death for the MAI. That would ments—measures designed to protect workers and communities. be a happy ending indeed for a treaty that would tie its signatory For example, government requirements for a minimum number of countries to the unfettered "free" global market economic model local people being employed in a foreign firm, the use of a certain for 20 years. There would be every reason to celebrate the failure percentage of domestic products, technology transfer and so forth By subverting national and local priorities to the needs of foreign investors, the MAI poses a dangerous threat to democratic THE RACE AGAINST TIME After a smooth first year and a half of negotiations, the MAI entered a far rockier phase in early 1997. Problems arose due to demands by OECD countries for an increasing number of reserva- tions and sectoral carve-outs, and also with the high-speed emer- gence of anti-MAI campaigns in one OECD country after another. Although serious preparations for the MAI had already begun in 1991, non-governmental organisations (NGOs) representing environment, development, women and other sectors which were sure to be impacted by the MAI were not consulted until October 1997. The negotiators are now embroiled in a race against time in order to avoid another postponement of negotiation deadlines—a delay that might mean the kiss of death for the MAI. That would be a happy ending indeed for a treaty that would tie its signatory countries to the unfettered "free" global market economic model for 20 years. There would be every reason to celebrate the failure 30 + NEXUS APRIL - MAY 1998 political processes.