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that globalisation in its current shape is responsible for a dramatic increase in global inequality. In 1965, the average personal income in G7 (Group of Seven) industrialised countries was 20 times that in the seven poorest countries in the world; in 1995, the gap was 39 times as large. Polarisation and income inequalities are also growing: the share of income going to the top 20 per cent of the population has increased almost everywhere since the early 1980s. UNCTAD blames the liberalisation of market forces for these developments and considers the current situation inevitable until regulation of the economy is put back on the agenda. that globalisation in its current shape is responsible for a dramatic foreign investors—into binding ones. Negotiations lasted for two increase in global inequality. In 1965, the average personal years but then came to a halt. income in G7 (Group of Seven) industrialised countries was 20 The formal reason for the discontinuation was the United States' times that in the seven poorest countries in the world; in 1995, the _ refusal to give Canada an exemption on national treatment for cul- gap was 39 times as large. Polarisation and income inequalities ture. The underlying motive, however, was the ambition of some are also growing: the share of income going to the top 20 per cent negotiating parties, particularly the US, to start negotiations on a of the population has increased almost everywhere since the early more comprehensive agreement on liberalising investment 1980s. UNCTAD blames the liberalisation of market forces for —_ flows." these developments and considers the current situation inevitable The next year, in 1991, the OECD Ministerial Conference until regulation of the economy is put back on the agenda. ordered a study into the feasibility of a multilateral framework for investment. The work was initially carried out by two OECD TNCs AND THE ART OF JOB-KILLING working groups: the Committee on International Investment and Although TNCs present themselves as creators of wealth and Multinational Enterprises (CIME) and the Committee on Capital employment, the figures reveal something different. In fact, one Movements and Invisible Transactions (CMIT)."* of the main characteristics of a competitive and successful TNC is This work was accelerated in 1994, when five working groups the "shedding" of jobs. Between 1993 and 1995, global turnover "composed of independent governmental experts were set up to of the top-100 TNCs increased by more than 25 per cent, but dur- prepare the major elements in the MAI". During this preparatory ing this same period the same companies cut 4 per cent of their phase, business interests were systematically consulted. global workforce of 5.8 million—over 225,000 people." Collaboration existed not only with the OECD's Business and TNC tendencies towards mergers, relocations, automatisation Industry Advisory Council (BIAC), which unites numerous busi- and centralisation of production and distribution are recipes for ssociations and has formal consultative status at the OECD, job losses. A part of the obsolete workforce might be employed but also with individual corporate lobby groups such as the ICC. by subcontractors, a "trouble-free" source of labour which TNCs At their May 1995 conference, the OECD country ministers increasingly make use of. Subcontractors are often skilfully decided to initiate negotiations on a MAI, with the goal of com- played off against each other, result- pleting an agreement by May 1997. ing in lower prices as well as The OECD countries made no secret reduced wages and worsened work- Although TNCs present of their intentions to negotiate a treaty ing conditions. themselves as creators of wealth with the "highest standards" of protec- Another unfortunate fact about . tions and rights for foreign investors, FDI is that it very often leads to the and employment, the figures only afterwards inviting non-OECD buying up and restructuring of local . countries, mainly in the Third World, ying up g y companies so that they can produce . to join. The process of soliciting non- more with fewer employees. fact, one of the main EU members started soon afterwards, Around two-thirds of all FDI in the characteristics of a competitive in the first of a series of ongoing period 1986 to 1992 consisted of ful TNC is th negotiations with interested mergers and take-overs."' and successiu is the countries.'* The sad truth about TNCs is that "shedding" of jobs. NGO observers following the nego- tiations between the EU and the ACP (African, Caribbean and Pacific) the increased growth, investment, monopolisation and concentration upon which they rely, as well as the resulting job losses and envi- countries about a revised Lome Convention" report that the EU is ronmental degradation, are a structural characteristic of the cur- pressuring these former European colonies to accept the MAI as rent neoliberal economic model. However, the voices calling for part of a new Convention.” a halt to this endless pursuit of deregulation are growing louder From the outset, the MAI was also intended to prepare the and are more often coming from unexpected sources. UNCTAD's __ ground for a global investment treaty within the World Trade "World Investment Report 1997" ends with a warning to world Organization." leaders that the activities and the market powers of TNCs can in The main building blocks of the MAI as we know it—including fact undermine the health of the global economy. its all-encompassing definition of investment and the principles of national treatment, roll-back, standstill and so forth—were in GROUNDWORK ON THE MAI NEGOTIATIONS place from the start of the negotiations, thanks to the four-year Although preparations for the MAI have been underway for feasibility study. close to a decade, official negotiations started only in 1995 and Official negotiations kicked off in September 1995 in a negoti- the first draft treaty was not ready until January 1997. Whereas ating group chaired by Dutchman F. A. Engering, with representa- negotiations had until this time been a relatively harmonious tives of all OECD states as well as the European Commission. process involving negotiators from the most neoliberal branches The WTO was invited as an observer. of national governments and corporate lobby groups, the past year Since that time, this negotiating group has met every four to six has been full of unexpected pitfalls. The combined impacts of weeks, and working or drafting groups convene more frequently. conflicts between OECD countries and increasing environmental Between meetings, delegates circulate texts and positions through and trade union opposition have turned the negotiations into a electronic mail.” and employment, the figures reveal something different. In fact, one of the main characteristics of a competitive and successful TNC is the GROUNDWORK ON THE MAI NEGOTIATIONS Although preparations for the MAI have been underway for close to a decade, official negotiations started only in 1995 and the first draft treaty was not ready until January 1997. Whereas negotiations had until this time been a relatively harmonious process involving negotiators from the most neoliberal branches of national governments and corporate lobby groups, the past year has been full of unexpected pitfalls. The combined impacts of conflicts between OECD countries and increasing environmental and trade union opposition have turned the negotiations into a high-speed race towards the finish line. Talks about something resembling a MAI within the OECD were launched as long ago as 1988, when its investment commit- tee began working to convert existing non-binding OECD agree- ments—particularly the rules concerning national treatment for COSY CONSULTATIONS WITH BIG BUSINESS Business has had direct input in the MAI framework throughout the entire negotiation process. Apart from the formal consulta- tions carried out by the negotiating group with both the BIAC and 32 - NEXUS APRIL - MAY 1998 "shedding" of jobs.