Antoni's Wire Service

Date: Sun, 13 Dec 1998 19:51:52 -0400 (AST)
From: Antoni Wysocki <>
To: Undisclosed recipients
Subject: MAI down; NAFTA to go

Hey y'all,

After months of speculation, supposition, claims and counter-claims it is at last official : the MAI is dead at the Organization for Economic Cooperation and Development (OECD). The MAI Home Page of OECD Online confirms this in nine clipped sentences, the most salient of which I have included below.

An informal consultation among senior officials responsible for investment policy was held on the morning of 3 December 1998, at OECD headquarters in Paris.

This meeting followed an earlier consultation on 20 October and a discussion of investment matters at the OECD's Executive Committee in Special Session (ECSS) on 22 October.

Negotiations on the MAI are no longer taking place. However, the officials agreed on the importance of multidisciplinary work on investment at OECD...The officials reaffirmed the desirability of international rules for investment. ---

By all means, let's take credit where credit is due and congratulate ourselves. The anti-MAI campaign has been a struggle equally significant for its direct consequences - denial of enhanced power and prestige to multinational firms - and for its implicit effect in affirming the capacity of progressive movements to significantly shape policy.

Yet, having said this, one must bear in mind that the MAI was not an aberration, not an isolated initiative of rogue bureaucrats. Rather it was the logical extension of the neoliberal agenda which has dominated economics departments and finance ministries since the late 1970's; in fine, the project of reinstating laissez-faire capitalism in the industrialized nations. While the MAI was one of the more radical proposals to advance this program similar concepts underpin a host of international agreements already signed or now under consideration.

Canadians in particular should take note that the MAI was quite consciously modelled on the North American Free Trade Agreement (NAFTA). True, Barry Appleton, Canada's doyen of international trade law, has argued that the disciplines of the MAI threatened to surpass even those of the NAFTA (see BC Legislature Hansard, 09/29/98, for Appleton's testimony before BC's Special Committee on the MAI). However, Appleton has equally made it clear that it was the "success" (in serving corporate interests) of the NAFTA that encouraged the MAI negotiators to push for even more this time out.

Moreover, one cannot be deader than dead. As it is the NAFTA has put paid to the notion that Canada can resist the American imperative to subordinate all concerns to those of the market. Already Canada has had to rescind its restrictions on the dangerous chemical MMT - and pay millions of dollars in compensation to MMT producer Ethyl Corp. - thanks to a suit brought under the increasingly infamous Chapter 11 of NAFTA. Now word comes that Sun Belt Water Inc. of California is suing BC under Chapter 11 because the province refused to allow the firm to divert BC water for sale to the US (see "B.C. vows to retain ban on water exports", Vancouver Sun, 12/10/98). Of course, one of the main arguments against the original Canada-US Free Trade Agreement (C-USFTA) was that it would obligate us to allow American corporations unlimited rights to our water.

I certainly do not mean to imply that the big bad USA, through NAFTA, is responsible for all that is wrong in Canada today. Fish populations were being driven to collapse years prior even to the C-USFTA; Paul Martin was playing to Bay Street at least as much as Wall Street when he replaced the Canada Assistance Plan with the Canada Health and Social Transfer; Mike Harris has gutted environmental regulation in Ontario because he wanted to, not under compulsion from NAFTA lawsuits.

This must not be glossed over : Canadian politicians - including even the NDP for the most part - have accepted neoliberal ideology as established truth. Neoliberalism maintains that the state must be ruthlessly pared down to its "essential functions" : maintenance of domestic law and order and surety against foreign military intervention. In short, ensuring a stable political climate so that corporations are free to go about their business unhindered from both within and without the countries they operate in. Such views have informed Canada's domestic and foreign policies alike for nearly 15 years now.

All the same NAFTA is an especially pernicious undertaking. It expressly privileges corporations in a manner hitherto unknown whilst enshrining in law the principle that the highest good is growth in trade and investment, and that anything which interferes with this is ipso facto wrong. Even the constitution of the World Trade Organization (WTO) - horrible as it is - does not allow for the former aspect (complaints to the WTO can only be brought by states, not firms).

The dispute settlement panels of NAFTA Chapter 11 are incompatible with even the liberal democracy characteristic of Canada from the end of World War Two until the election of Brian Mulroney. For those unfamiliar with them, let me note that cases are decided by a tribunal of three - including an international trade expert, with concomitant pro-commerce bias, for arbiter - in secret, without chance of appeal. No one except designated government officials or agents of the plaintiff firm are allowed so much as to submit a brief to the panel. Indeed, there is no obligation even to inform other persons of the proceedings.

Perhaps worst of all, the presumption is always and explicitly in favor of trade. Any measure taken by a government which in any way denies a foreign company potential profit - no matter how meritorious the purpose of the law - is sanctionable. While the dispute settlement panels do not have the power to directly rescind legislation which offends corporations the tribunals can impose such heavy monetary penalties as to effectively compel governments to do so.

In the wake of the MAI's defeat it is surely time to turn our attention to NAFTA. One possibility would be seek the revocation of Chapter 11. This would, in fact, be tantamount to signing off from NAFTA altogether since Chapter 11 is the treaty's enforcement mechanism.

Another strategy on a related theme - which could serve as either a complement or an alternative to the above - was recently put forward by an unlikely candidate : Abraham Katz, outgoing president of the U.S. Council for International Business. The always quotable Katz (this is the man who warned the White House re MAI : "We will oppose any and all measures to create or even imply binding obligations for governments or business related to the environment or labor") had this to say at a speech in New York on Dec. 08/98 :

The objective of these groups, supported by certain governments, is to be able to judge the behavior of companies in what would amount to kangaroo courts in which non-governmental organizations and trade unions would have a major voice. ---("US business leader sees free-trade threat", Journal of Commerce, 12/10/98)---

I am not sure what sort of forum Katz is envisaging here but his blinkered vision is breathtaking. He expounds on the supposed injustice of corporations being brought to book in less than friendly surroundings but he apparently finds the NAFTA, and NAFTA manque (i.e. MAI), dispute panels quite unproblematic. I would say that if NAFTA panels don't qualify as "kangaroo courts" the Moscow Show Trials were examples of due process!

Still and all, he may be on to something. Corporations are not now and never have been properly subject to the full weight of the law. In the aftermath of Westray, and the fallout from the activities of Dosco/Sysco/et al., Nova Scotians, I should think, scarcely require the point to be stressed.

As presently constituted in Canada the judiciary is ill-equipped to deal with the forces of organized capital. To take one example : in order for the prosecution to gain a murder conviction it is necessary to prove mens rea ("guilty mind"; awareness that one's act was wrong). Since corporations, though legal persons, are obviously mindless, deaths brought about by company policy can only be blamed on an individual.

Now, not only is this unjust - since policies are typically framed and enforced by a number of people why scapegoat a single individual? - but it is also ineffecual. This for the very reason that the former consideration renders it is almost impossible to show that a given person was responsible for all factors leading to a given fatality. It also means that, in the highly improbable event of a conviction, someone may go to jail but the company can keep right on using the same hazardous procedures.

In light of this I find Katz's notion rather attractive. To place corporations on trial outside the present parameters of the legal system - expeditiously, with real penalties and allowing scope for interventions from trade unions and other non-governmental organizations - sounds like a worthwhile aim to me! Yet this is only asking for protocols analogous to those of Chapter 11 - a useful point to raise, I should think, in a campaign to eliminate said Chapter.

In closing I will add that, like the blocking of the MAI, cancellation of Chapter 11 would be beneficial in two ways. To wit : it would at once wrest back some space for governments in Canada to enact progressive legislation (granted, we would then be faced with the challenge of electing significant numbers of progressives to office - but that's another story) while at the same time continuing to build an extra-parliamentary movement.