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Pressure from citizens’ groups kills trade treaty for now

Special to the National Catholic Reporter

The Multilateral Agreement on Investment, a global economic treaty proposed by the world’s wealthy nations, is dead, a victim of powerful lobbying by nongovernmental organizations.

Opponents of the treaty warn that global big business, abetted by the U.S. and European Union governments, intends to revive the treaty’s ghost in a new arena -- the World Trade Organization in Geneva.

The planned global economic treaty, which was being negotiated through the Paris-based Organization for Economic Cooperation and Development, would have removed almost all restraints on international trade and investment (NCR, Oct. 9, 1998). It was killed Dec. 3, 1998, after the French government bowed to domestic pressures from the nation’s cultural industries such as film and television. Those industries remained unwilling to open themselves up to unbridled international competition and investment.

A State Department spokesperson told NCR that “pressure from NGOs [nongovernmental organizations] on the left” also contributed to French Prime Minister Lionel Jospin’s decision to yank his delegation out of the negotiations.

Opponents of the Multinational Agreement on Investment -- public interest and labor groups around the world -- fiercely criticized the agreement’s sponsors and their bid to establish a global economy with minimal restrictions on capital movements. Critics claimed the Multilateral Agreement on Investment improperly favored multinational corporations’ right to invest at the expense of a government’s sovereign right to decide its own economic policy.

But opponents of the agreement are concerned that big business and free-trade friendly governments will try again. Trade officials from the European Union and Japan announced Jan. 7 that they intend to pursue an MAI-like investment framework at the next World Trade Organization conference, which will be held in the United States in December.

If consensus could not be reached at the 29-nation Organization for Economic Cooperation and Development, why do the wealthy nations expect to succeed at the World Trade Organization, a forum made up of 132 nations, many of them poor?

Treaty opponents contend that the United States and the European Union dominate the World Trade Organization. Poor nations opposed to fully opening their economies to foreign investors would not have enough clout at the World Trade Organization to effectively combat it.

“Whether you call it MAI or not,” said the State Department spokesperson, “these issues still need to be handled.” Which issues? Activists say an investment pact like the Multilateral Agreement on Investment will enable foreign investors to challenge labor and environmental protection policies as barriers to investment.

For example, recent lawsuits brought by corporations against the U.S. and Canadian governments under the North American Free Trade Agreement -- which is ideologically akin to the Multinational Agreement on Investment -- argue that a global treaty would lead to greater legal pressure on governments to relax restrictions on corporations.

This ongoing saga -- of rich nations and their transnational corporate allies seeking trade advantages at the expense of national sovereignty and the public interest -- is replete with secrecy and heated rhetoric.

Negotiators for the Multilateral Agreement on Investment did not consult with critical citizens’ organizations until the agreement was nearly completed and after a draft of the agreement was, in the words of Lori Wallach, director of Global Tradewatch, “liberated from the OECD [Organization for Economic Cooperation and Development] Xerox room” in 1996 -- meaning someone got hold of a photocopy.

Wallach’s organization and more than 600 other groups around the world then unleashed a campaign to raise public awareness against the secretive proposed treaty.

Meanwhile, though the Multilateral Agreement on Investment has been scrapped, a fresh free-trade battle relevant to the United States begins this month as proposed fast-track legislation again enters the House of Representatives.

Since November 1997 President Clinton has tried and failed twice to win congressional approval of fast-track trade negotiating authority, which would require legislators to consider White House trade deals without amendments and with limited debate in both houses of Congress.

National Catholic Reporter, January 29, 1999