National Radio Project

MAKING CONTACT

Transcript: #16-98 Blocking the MAI: Activism and Free Trade
April 22, 1998

Program description at http://www.radioproject.org/archive/1998/9816.html

Phillip Babich: Welcome to Making Contact, an international radio program seeking to create connections between people, vital ideas and important information. This week on Making Contact:

Dan Seligman: The MAI is the ultimate wish-list item for the fans of economic globalization.

Maude Barlow: I believe it's very beautiful. I actually think that this is a, what I'm beginning to use the term "the turn around decade", because I think that we are on the cusp of something very new and very exciting that we have to be ready to do it.

Phillip Babich: As the Multilateral Agreement on Investment, or MAI, hits some turbulence along the route to approval by the Organization for Economic Cooperation and Development, grassroots activists are mobilizing an international effort to challenge economic globalization. On this program you'll hear about the MAI, a far reaching trade treaty that would grant transnational corporations greater leverage to invest in foreign countries, undermining local control over resources, social conditions, and environmental standards. I'm Phillip Babich, your host this week on Making Contact.

As economic globalization takes hold around the world, capital investment is out-stripping trade in goods and services. Hence the Multilateral Agreement on Investment, the next generation of global trade treaties. Under the MAI, corporations would essentially have the right to sue governments -- local, state, or national -- if that government's laws directly or indirectly pinged on investors' profit schemes.

Dan Seligman: If you like the North American Free Trade Agreement, you're going to love the MAI, the Multilateral Agreement on Investment.

Phillip Babich: Dan Seligman is director of the Sierra Club's Responsible Trade Campaign.

Dan Seligman: The main problem with the MAI, as we see it, is the erosion of democracy and the loss of local control, state control, in deciding about how what we go about protecting the environment, developing our communities and insuring a high quality of life for our neighborhoods.

Phillip Babich: Currently the MAI is being negotiated at the Organization for Economic Cooperation and Development, or OECD, the powerful international trade and policy group that represents the world's twenty-nine most industrialized nations. Joshua Karliner is author of "The Corporate Planet: Ecology and Politics in the Age of Globalization," and editorial coordinator of the on-line magazine Corporate Watch.

Joshua Karliner: A total of 477 of the world's 500 largest transnational corporations are based in these OECD countries, and most of these are organized into groupings like the International Chamber of Commerce, the U.S. Council for International Business, and the European Roundtable of Industrialists, along with Kidanran, which is a Japanese, powerful Japanese, chamber of commerce. All of these corporate lobby groups have been either directly or indirectly involved in the shaping of the MAI. And in fact, it's being negotiated in their interests. It is, in many ways, a global corporate constitution.

Phillip Babich: According to the International Forum on Globalization, the MAI is a binding international agreement that would restrict the power of signatory nations to control foreign investment policy. Furthering the interests of transnational corporations, the MAI builds on previous trade treaties such as NAFTA and GATT, says Lori Wallach of Public Citizen's Global Trade Watch.

Lori Wallach: The NAFTA and the World Trade Organization (WTO), which was established in 1994 as part of the Uruguay round negotiations of GATT, the General Agreement on Tariffs and Trade; those institutions, for instance, brought to life what I would suspect would be the warmest, coziest dreams of the worst agribusiness CEO thug you can imagine. Which is, for instance, in the area of food, the standards of an international agency based in Rome called the Codex Alomentarius. Sounds like a stomach disease. It is not far off to understand it that way. This is an agency that is largely controlled by the multinational agribusiness and chemical companies, they actually sit at the table. Corporations like Nestles, the big fighter of the baby-milk boycotts, have more representatives at the table than all the African countries for the last few meetings. It's in Rome, and standards are set that under NAFTA and the World Trade Organization become the world food standard. And to put this into perspective, up until we made a big hooha about it in '93, the Codex had tolerances permitting DDT residues on fruits and vegetables. They still allow it on dairy, grains and milk and meat. And the idea that something so obviously disastrous that the whole world largely bans, under the GATT and NAFTA standards, would be tolerated, gives you an idea of the race to the bottom.

Dan Seligman: The main difference with GATT, the General Agreement on Tariffs and Trade, is that GATT regulates trade in goods and services between countries. This is the actual movement of products between countries. The MAI puts another building block in the edifice of economic globalization by creating rules to protect the ownership of actual property within a country.

Phillip Babich: Dan Seligman of the Sierra Club.

Dan Seligman: When we're talking about property, we're talking about land, we're talking about factories, we're talking about timber or mining concessions. These are tangible property assets that would be regulated by the MAI. We're talking about transnational corporations with foreign-direct investment assets of eight trillion dollars worldwide. That's a lot of money that these folks have at their disposal and a lot of investment that they're trying to protect with this new powerful judicial system. And, of course, they're going to use that to the fullest extent they possibly can. So, we're certainly familiar with our own Environmental Protection Agency, which has very limited resources to even enforce the laws we have on the books. Now they're gonna face a torrent of litigation coming down from international courts brought by mega-international corporations.

Protesters: NAFTA, GATT, MAI: Big corporations against you and I! NAFTA, GATT, MAI: Big corporations against you and I!

Phillip Babich: As corporations have been organizing, primarily behind closed doors, grassroots activists have revved-up a mobilization effort for fair trade, not so-called "free trade." Reminiscent of the NAFTA debate a few years ago, and more recently the debate over fast-track legislation that was defeated by the U.S. Congress last November. Four months later, in March, dozens of demonstrators rallied outside a World Trade Organization event held in San Jose, California. The keynote speaker was the Director General of the WTO, Renato Ruggiero, an ardent supporter of the MAI, and whose organization is closely associated with the agreement talks and eventual outcome. Critics of the MAI charged that the trade agreement will continue an erosion of labor, human rights and environmental standards begun under the first globalization policies of the WTO. But Ruggiero defended the WTO, saying that it is not the place of a trade organization to deal with such issues.

Renato Ruggiero: You cannot have a trade rule to solve a social problem. You must have a social rule that solve a social problem. Protectionist measures, as to put in question the so-called "comparative advantage" are not the solution to the problem, because you have to be very clear with yourself. What do you want? Do you want really to improve the condition of life of the poor children of the Third World, or do you want to safeguard some uncompetitive jobs in some rich countries? Because the solutions are very different. If you want to save the uncompetitive jobs, then you close your border. But if you want to help the poor children of the world, then you have to what in the ILO they are doing to promote the labor standards, to make verification, and to help also with some international financement, to give an alternative to the children who, instead of working, they could have some professional, vocational training. Trade, trade sanctions are only aggravating the conditions of life of the poor children of the third world. And we have to be honest, and clearly say what is the reality, not what we would like.

Phillip Babich: Ruggiero recommended that advocates for labor rights take their concerns to the ILO, the International Labor Organization. But Juliette Beck, of the California Fair Trade Campaign, pointed out to him that the ILO has little enforcement authority.

Juliette Beck: Well, the ILO has no enforcement mechanisms. So until labor standards and environmental protections can be treated equally to the interests of businesses, such as intellectual property rights and patents -- equally on equal footing with the same amount of sanctions and might and power behind them -- then we will still be demanding fair trade, not free trade. Look what's happened under NAFTA. Has Mexico invested more in their environment? Have you been down to the border lately? Pollution is out of control. Babies are being born without brains.

Protesters: NAFTA, GATT, MAI: Big corporations against you and I!

Phillip Babich: Outside the WTO event, partially sponsored by the Brookings Institution, which recently published a policy paper titled, "Global Phobia: The Wrong Debate Over Trade Policy", activists picketed, denouncing what they termed "an erosion of democracy." Celia Alario is with Rainforest Action Network.

Celia Alario: We also lose our right to enforce a federal law if an investor, whether it's an individual or a corporation, believes that that law is violating their capacity to make a profit. That means the National Endangered Species Act, The Clean Water Act, The Clean Air Act, possibly even The National Environmental Policy Act, which established our EPA, could be challenged by a corporation from another country and could be abolished. And by signing on to this, the United States agrees to do that.

Phillip Babich: Paul George is with the Peninsula Peace and Justice Center.

Paul George: I think you're gonna see a unified uprising against this movement like the world has never seen. It's truly amazing and inspiring and I think we can stop it and wake people up to what's being done behind closed doors, behind their backs.

Phillip Babich: You used the work "uprising". That's reminiscent of the 1994 Zapatista uprising. It was against these trade policies. Is that what you're describing?

Paul George: Well, I don't think it'll be an armed uprising, but it certainly will be a very loud, grassroots shout heard around the world. From the working people around the world to the people who want to protect the environment, people who try to protect human rights and fight for human rights, they're all together in fighting against this. And it will be quite a hue and cry against this MAI treaty.

Phillip Babich: Another activist, Steve Brooks of the Bill Motto Veterans of Foreign Wars Post, connected economic globalization with an increase in militarization in some countries where resistance against trade globalization has been growing, such as in Mexico, where last December, forty-five unarmed peasants were gunned down by paramilitary troops.

Now, you have with you a cross and, with the globe being crucified I believe. Can you describe what we're looking at here?

Steve Brooks: Well, what I put down on this cross was "1998: Fear the Globalizaiton". And essentially is that everybody needs to be very awake this year with what globalization's going to do. And what's gonna happen is more of what I've got on the other side of the cross which was NAFTA being responsible for the massacre -- December 22, '97 -- of forty-five people that were shot and brutalized. There's gonna just be more of the same on a global scale and it's quite the opposite of waving the earth flag of ecology.

Phillip Babich: So what you're saying is that as globalization continues, people fight back. To keep the status quo, there's an increase in militarization which results in deaths like you describe on December 22 in Mexico.

Steve Brooks: That's correct and it will continue. It will get worse. People will get caught in the grip of this because it will chew up... Right now the laws are being put in place so that you cannot actually sue or impede a corporation's profits. If you try to demonstrate and it actually kind of what Oprah Winfrey was up against in Texas with suin' her on the meat thing, you know? The companies are actually... Our big companies in the U.S. are now getting the laws in place that we will be put in jail for trying to stop this process. So if we impede it in any way, their profit making, it's actually going to be against the law to stop them from chewing up all the resources. So things are bein' put in place to prevent it from even bein' stopped by us, that we can't... Like our civil liberties of protesting, I guess, are gonna come next.

Nadra Foster: You're listening to Making Contact, a production of the National Radio Project. If you want to get in touch with any of the organizations you hear about on this program, please give us a call. It's toll free: 800-529-5736. That's 800-529-5736.

Phillip Babich: Although the MAI has been negotiated in the OECD since 1995, virtually no one in the U.S. Congress had heard about the treaty until global trade watch groups began circulating information on Capitol Hill last year. Still, the "MAIQ", said Lori Wallach of Public Citizen, remains low here and abroad among elected officials. She spoke at an organizing event in San Francisco.

Lori Wallach: They have no idea this thing's been negotiated since 1995, and that it is probably the broadest, most powerful international commercial treaty that has ever been proposed. No one knows. I had the same exact experience in France, where the chair of their foreign relations committee had to have me, in English (think of how offensive), go to Paris and express to their senators what the contents were. And this has been the case with the exception of Canada, who we should all hail as the example of brilliant organizing, but basically at this point they have more or less armed struggle over the MAI in the streets. Their "60 Minutes" program has done two one hour exposÈs on MAI. That's the level we need to bring it to.

Tony Clarke: Two years into the negotiations, there have been no public documentation whatsoever dealing with this, with this treaty negotiation.

Phillip Babich: Tony Clarke is with the Canada based Polaris Institute, one of the first organizations to expose the secretive MAI negotiations.

Tony Clarke: And so we began a search process in the United States, in Europe and in Canada. And finally, we were lucky enough in Canada to receive, one March morning, a brown envelope with the text inside. And we quickly analyzed that text and made it public in our national newspaper and then handed it over to Public Citizen to put it on the world wide internet so that everybody in the world could know what was happening.

Phillip Babich: Canada is currently facing a lawsuit that could foreshadow what's to come if the MAI takes effect. A U.S. based chemical corporation, Ethel, sued the Canadian government after it banned MMT, a gasoline additive. Under a NAFTA provision, Ethel took legal action against Canada to recover lost future profits. Maude Barlow of the Council of Canadians, a widely respected policy institute, explains.

Maude Barlow: Canada has now been slapped with a lawsuit for banning MMT, which is a manganese additive to gasoline. Banned it last spring. Have to tell you it's not because the Canadian government is so wonderful and listened to the concerns of people, the citizens around health, MMT is so bad it gums up the pollution device control, pollution control devices of cars and the big three auto makers were lobbying for it. So our government said, "Oh well, you want it? Of course you get it." Now the only company that makes MMT is an American based company, Ethel, and it's suing the Canadian government for two hundred and fifty million dollars for future lost profit and for damaged global reputation. Under the terms of NAFTA, likely they'll win. It's being held in secret. We don't know where it's being heard. We don't know who's hearing it. We don't know the time frame. We have no access to this panel. Nobody has any access to this and the decision is supposed to be binding.

Phillip Babich: The U.S. State Department, which is handling the MAI negotiations at the OECD, contended that it could not comment on the Ethel matter, since the case is still pending. But Alan Larson, the lead negotiator for the government, said the MAI will not jeopardize U.S. laws.

Alan Larson: There's nothing in this agreement that would prevent the United States, or our state governments or our localities, from regulating to protect the health, safety and environmental standards. The basic core of an investment agreement is a non-discrimination core. That is to say that, in general, and subject to certain exceptions that may be negotiated, in that trying to accomplish those objectives you're not going to discriminate against a company based on its ownership. Now we have not found it really necessary in the United States to discriminate against foreign-owned companies in order to achieve our objectives.

We are making absolutely sure, with the help of the best minds we have at the U.S. Department of Justice and at EPA and elsewhere, that the expropriation provisions of this agreement are written in such a way that it will not be possible for anyone to contest, you know, regulatory measures that may have some impact on the bottom line of a company, but are environmental regulation measures. So we're going to get that language absolutely right. I think that expropriation and property rights abroad is something that we have a strong interest in, and obviously our companies, but also those who invest in our companies do want to make sure that when they invest abroad they're not going to be subject to arbitrary government decisions that unlawfully expropriate their property. So there, we think this is a balance here that's going to work very much in our favor because we simply don't, as a country, try to protect health, safety and the environment by discriminating against a company based on its ownership.

Dan Seligman: This concept of "fairness" or "non-discrimination" seems like a fair, kind of common sense idea.

Phillip Babich: Dan Seligman of the Sierra Club.

Dan Seligman: But when you apply it, let's say, to the case of Brazil, then you're getting a situation where the scale of production grows to a point where environmental resources of global significance come under tremendous pressure. I'll just offer one example. Brazil, as like so many other developing countries, has decided to attract foreign investment by waving, or by offering national treatment, non-discriminatory treatment, to foreign companies wishing to invest in the mining sector. Before Brazil changed its laws, foreigners could only own forty-nine percent or less of a mining company in that country. After changing the law, and giving four mining companies, mainly Canadian and U.S. companies, equal access to the gold and copper reserves that the country has... Mining investment leapt in one year from about sixty million dollars a year to two point five billion dollars a year. Most of those gold and copper reserves lie underneath the Amazon rain forest. As a consequence of the increased penetration of the Amazon, by mining and timber and cattle companies, most often foreign, deforestation in the Amazon in recent years has tripled. So we're seeing the destruction of the rain forest as a consequence of the opening of Brazil to foreign investment on terms that are very similar to those that would be dictated by the MAI.

Phillip Babich: The State Department's Alan Larson, however, says the MAI will help promote both U.S. business interests and environmental standards abroad. One example, says Larson, is that U.S. corporations will be allowed access to state enterprises now being privatized in Central and Eastern Europe. An opportunity for investors, and a new venue for supposedly cleaner U.S. power plants.

Alan Larson: I think that, through this agreement, we will be able to get improved access for our investors. They invest in telecommunications facilities and other facilities that are being privatized. Secondly, in many parts of the world, power plants are being constructed on an investment basis. And we think it would be greatly to the benefit of our environmental policy, as well as to our investment policy, if those types of opportunities were opened to foreign investors, including American investors, who have higher quality environmental standards, frequently, than local companies.

Phillip Babich: But the State Department's reasoning hasn't washed with many citizen groups, and it remains to be seen exactly how the United States can carve out for itself adequate protection for its laws, promote labor and human rights, and raise environmental standards, without fundamentally altering basic precepts upon which the MAI was drafted. Joshua Karliner of Corporate Watch.

Joshua Karliner: Well the U.S. government told us that NAFTA would be good too, and it's very clear that it hasn't been very beneficial either to workers or the environment or to the economies of either country, or any of the three countries of NAFTA. I think the same can be said for the MAI. It's important to recognize that the U.S. government is working hand in glove with American corporations, with U.S. based corporations, to negotiate the MAI and to promote it both in the media and politically. The U.S. government and multinational corporations worked very closely to promote NAFTA. They've worked very closely together to promote GATT and the World Trade Organization, and the MAI is the next step in their game plan to build this global corporate constitution. And so of course they, they're working very intimately together.

Lori Wallach: The best part of what is otherwise a really scary story about globalization and the invasion of our democracy by instruments like NAFTA and the World Trade Organization and the MAI... The good news is the fight back, and it really is inspirational.

Phillip Babich: Lori Wallach of Public Citizen.

Lori Wallach: We're working with coalitions around the world. The solidarity is remarkable because, basically, what we're seeing is the same outrages, unacceptable effects, attacks on our sovereignty and democracy, the right to make good decisions that will affect our lives. Folks whose standard of living in the developing and developed world is being pushed down. Our coalition partners in the South say this is like colonialism all over again. The difference is, instead of sort of doing it in white tie and tux and tails over cocktails, the guys got greedy and wrote it down on paper and passed it around and had a national debate on it that we forced. And, as a result, there's now a name to it, this process. It's "NAFTA", it's concrete, it's "GATT", it's "MAI". And the combination of the effects, and they're getting greedy enough to write it all down and cross their t's and dot their i's, has meant folks have a very active target, that's concrete, and they have a lot of motivation to get after it.

Maude Barlow: We are not opposed to a set of rules guiding the notion of foreign-direct investment. In fact, we deeply believe that there has to be a set of rules. I think if you were to take the MAI and take every single clause in it and put "not" at the end of it, you'd have the beginning of what we'd have to start to do.

Phillip Babich: Maude Barlow of The Council of Canadians.

Maude Barlow: But it is something we're going to have to do as people, as citizens. We are standing up and saying "no" to this all over the world. But we are going to have to come up with our own language around what we believe exists, what has to exist. As Martin Luther King said, "Legislation may not change the heart, but it can restrain the heartless." And we need rule. We need to bring the rule of law to global capital, otherwise all of the work that we are all doing in our communities, is just like being in a boat and you've got some leaks and everybody's got a thimble and somebody's taking out water here and somebody's working on this there, and they just cut the back of the boat off.

I believe it's very beatable. I actually think that this is a, what I'm beginning to use the term "the turn around decade", because I think that we are on the cusp of something very new and very exciting and we have to be ready to do it. First of all, we have to defeat this egregious, outrageous, soul-destroying, earth-destroying document. And then we have to start to say, "What kind of citizen's movements can we build so that when our governments deny their responsibility to us, as they are doing all over the world, and decide they're just going to be a vehicle for these transnational corporations, what can we have in place? And I think the day of citizen politics is just starting.

Phillip Babich: That's it for this edition of Making Contact, a look at the Multilateral Agreement on Investment. Thanks for listening.

If you want free background information on this trade treaty, please give us a call. We've compiled a packet of research and contacts collected from many of the organizations mentioned on this program. You'll hear our toll free number in a moment. And special thanks this week to Judy Campbell, Mike Thornton and Peggy Law for recorded portions. I'm Phillip Babich. If you want more information about the subject of this week's program, call the National Radio Project at 800-529-5736. Call that same phone number for tapes and transcripts, or if you'd like to make a comment or suggestion for future programs. That's 800-529-5736. Making Contact is an independent production funded by individual contributors. We're committed to providing a forum for voices and opinions not often heard in the mass media. Our producers are David Barsamian, Phillip Babich and Denise Graab. Our senior advisor is Norman Solomon, and our executive director is Peggy Law. Our theme music is by the Charlie Hunter Trio. For everyone at Making Contact, thanks for listening.