The Multinational Agreement on Investments (MAI) is the TNCs follow up to the World Trade Organization (WTO). Having tasted blood in their success with the WTO, they are now going for the jugular while on what they perceive as a roll. The secrecy surrounding MAI was such that even ministers of most governments did not know what was going on until almost two years after the secret talks began in early 1995 within the OECD. OECD bureaucrats and their TNC advisors worked on highly secret drafts of a new global power structure that would place all power in the hands of international investors, giving them unprecedented rights? 5 Why the OECD? After all, the OECD is normally seen as a source of trade statistics and reports, not a place to negotiate trade agreements. But it seems that the resistance of Third World countries to proposed investor protection clauses in the Uruguay Round negotiations were so vehement, that the TNCs decided to pull these clauses out of the WTO negotiations, and instead instigated the OECD talks behind closed doors. The plan was that once the OECD members – representing the 29 richest nations – signed off, then Third World nations would face an “offer they couldn’t refuse”: sign up or forego foreign investments, in classic Mafia style.
Apparently, the existence of the MAI first came into the public domain in early 1997 when the Clinton administration tried to slip it into the so-called “fast-track” bill that would circumvent normal legislative debate in the USA. It turns out the OECD/TNC conspirators were hoping to have it signed quietly internationally by April 1997 without any public debate – in what only can be described as a devious coup. However, after the text surfaced, reactions came strong and fast, not only from many outraged American Congressmen, who threw out “fast-track”, but from abroad as well, particularly in France and Canada, who were soon leading a growing anti-MAI movement.
The outraged French Finance Minister described the MAI’s corporate privileges to manipulate competition between countries as “blackmail” and declared that the French parliament would not sign. In Canada, half the provinces and numerous municipalities released statements against the MAI. The EU parliament passed a resolution rejecting MAI as “too far reaching”. In New Zealand, the parliament was furious with its government when the story leaked. All over the world, NGOs are organizing. Efforts are being coordinated over the Internet, where most of the material for this chapter was obtained . To the chagrin of the initiators, the latest version of the rapidly changing text is readily available on the Internet. One current source is www.citizen.org. There are many others.
So what is it that has provoked such passionate reactions to a so-called “trade treaty”? Let us look at some of the provisions in MAI that would cement the control , power, and not least, the wealth of the TNC’s, if adopted.
Based on binding arbitration, the MAI would permit corporations to sue governments for compensation for limiting current or possible future TNC profits by passing laws such as environmental protection, human rights, labor standards, public health, consumer protection, and local community development, in short, any government policy or action that might limit their potential sales and profits.
Corporations could themselves choose the venue for the above binding arbitration, for example, the TNC-stacked International Chamber of Commerce. There would be no appeal, similar to the WTO tribunal.
Private investors could force governments to change their laws or risk being sued for compensation.
No regulative demands whatsoever can be put on corporations or investors. In particular, so-called “performance standards” that would affect foreign investors could become illegal, for example, any requirement that a government agency can only purchase organic foods, recycled paper, or use only renewable energy.
Any form of subsidy, aid, grant, or credit given to domestic firms or a particular group, for example, women, would be forbidden unless given to foreign investors as well. Also forbidden, for example, could be the EU support for economically distressed regions.
Corporations can demand compensation from governments for lost profit opportunities due to any disturbance to their business, for example, war, consumer boycotts, strikes, civil disturbance. (A convenient way to neutralize the effect of a consumer boycott!)
Sanctions or boycotts against other countries for human rights or other political reasons, such as against South Africa in the 1980’s or Burma in the 1990’s are not permitted. (Nelson Mandela would still be in jail!)
A signatory to the Agreement is committed for an incredible 20 years, as 15 years’ notice must be given, and not before the first five years have passed. Obligations to pay compensation for lost profit opportunity would last the whole period.
Notable by glaring absence are any obligations or accountability of the TNC’s or investors for their actions and policies, for example, their anti-competitive business practices, their unethical behavior, and their treatment of labor, local communities, and the environment.