Antoni's Wire Service

Date: Fri, 4 Dec 1998 23:22:43 -0400 (AST)
From: Antoni Wysocki
To: Undisclosed recipients
Subject: E.May testifies at NS Leg. re MAI

Hey everybody,

On Friday, Dec.4th/98 Elizabeth May, executive director of the Sierra Club of Canada, testified before a committee of the Nova Scotia Legislature. The Standing Committee on Economic Development heard from Elizabeth on the subject of MAI with particular regard to the status of negotiations and the likely effect of the MAI on the local economy.

Having acted as an intermediary between the Sierras and the Clerk of the committee I felt considerable satisfaction (and relief) at the mere fact of the presentation at length going ahead. All the same the meeting itself proved interesting.

The committee is composed of 9 MLAs, three from each party in the Legislature. The full complement of NDP members showed up, supported by their caucus colleague Howard Epstein, a brace of Tories were on hand and all three government members were in attendance.

I found that guessing party affiliations was pleasantly diverting (though a trifle too easy). I was already acquainted with 3 of the 4 NDP MLAs while the fourth was a dead giveaway in view of his easy manner with Howard and the others.

The Liberals made themselves fairly obvious by their obnoxious manner : one of them spent virtually the whole session noisily destroying a styrofoam cup while a second, arms folded, stared directly ahead, maintaining a supercilious expression throughout. I gained the distinct impression that they had decided in advance to barricade themselves against the presentation.

By process of elimination this left the Conservative duo. They were much more polite than the Grits but did not display quite the degree of interest in the proceedings manifested by the NDP.

Elizabeth gave a brief account of the development of negotiations on multilateral investment in the recent past, stressing that the OECD-MAI had to be understood in the broader context of the ongoing liberalisation of international commerce. To this end, perhaps, and to simplify the matter, she gave the impression that multilateral investment talks originated at the World Trade Organization (whereas negotiations at the OECD began in 1995 prior even to the establishment of the WTO).

The above notwithstanding Elizabeth's attempt to convey the message that concerns about the MAI arose not from one text in isolation, but from a set of principles common to a number of treaties, met with mixed success. Jamie Muir (PC/Truro-Bible Hill), seemed very intent on finding out whether "the" MAI was alive or dead and appeared unpersuaded that negotiations at the WTO could be tantamount to the same thing. Meanwhile, Francene Cosman, Minister of Community Services (the only Grit who deigned to speak at any point), apparently considered that it was "back to the drawing-board" for proponents of the MAI.

For all that I would say that Elizabeth opened some eyes. Her exposition covered the drawbacks of NAFTA chapter 11 and like provisions in other instruments (such as the MAI, of course). Elizabeth definitely got some attention when she explained that chapter 11 allows multinational corporations to sue Canadian governments in secret and without a chance of appeal. The Opposition members attended closely and even the pugnacious Cosman did not try to defend the measures described.

As an environmentalist Elizabeth was clearly less than comfortable speculating on the possible economic outfall from the MAI. Her main contribution in this area was to explain that a key element of the current crop of investment treaties is "national treatment", which is to say, according the same treatment (by legislators) to all investors regardless of whether they are foreign or domestic.

Elizabeth cited enforcement of the 200 mile offshore limit as a clear violation of national treatment and noted that there would be implications for other resource extracting enterprises such as logging companies and the Sable Offshore Energy consortium. Of course, given that the Sierras are far from keen on SOEP and Nova Scotia's present forestry practices, it is not to be wondered at that Elizabeth evidently found it hard to become exercised about this type of provision.

Instead Elizabeth naturally focussed on environmental issues. She showed how the WTO in particular has had a devestatingly regressive impact, breaking ground for the production and distribution of genetically modified material, promoting drift-net fishing and so on. This, she explained, was an inevitable result of the WTO's singleminded dedication to advancing the corporate agenda.

Her proposed solution was the promotion of countervailing institutions : a World Environmental Organization and a pumped-up International Labor Organization. Readers may recall some recent messages which I sent reporting advocacy of this idea by prominent public figures such as French Prime Minister Lionel Jospin (and also outlining my disagreements with this course of action! See 'Green WTO analog promoted').

After Elizabeth's exposition the committee members were invited to ask her questions. As might be expected, division of powers figured prominently with Howard wanting to know how the provinces could be bound in their areas of jurisdiction by an international undertaking on the part of the federal government.

Seemingly caught on the hop, Elizabeth spent a few moments fumbling for an answer. In the end she responded by suggesting that a foreign corporation could launch proceedings against Ottawa should the firm feel itself aggrieved by a province (or a municipality, which is not a separate level of government under the constitution but a subset of provincial rule). Ottawa in turn would hold said province accountable by, e.g., withholding tax disbursements.

In a brief discussion afterwards with Elizabeth and Howard the three of us agreed that, in essence, Canada's negotiating team had simply not bothered itself with constitutional niceties. Absorbed in their mission of writing the "constitution of a new global economy" (to quote WTO Director-General Reanto Ruggiero) the negotiators must either have overlooked the issue of separation of powers or regarded it merely as a technical obstruction which would be dealt with in due time.

Howard's participation induced a contretemps, with Cosman stating her displeasure at his pinch-hitting (Howard is not a member of the Economic Development Committee). For his part Howard - veteran of the cavilling Municipal Council - heckled Cosman and snapped his newspaper in her general direction. Darrell Dexter (NDP/Dartmouth-Cole Harbour), Chair of the committee, remained impassive in the face of the members' provocation and eventually the duellists dropped the matter.

Maureen MacDonald (NDP/Halifax Needham) set out a view - one she characterized as that of a friend working in the field of international development - and asked for Elizabeth's thoughts on the subject. Briefly, MacDonald's friend regards nation states as sites of institutionalized racism and consequently considers the dimunition of government's role as potentially liberatory. (In passing let me add that this position is one of the principal apologetics of neoliberal discourse).

Elizabeth responded strongly, not by trying to absolve nation states of wrongdoing but by showing that handing control over to transnational corporations could only render conditions even more inegalitarian. Quoting UNCTAD's 1998 Trade and Development Report Elizabeth noted that the combined wealth of the planet's three richest individuals is equal to the GNP of the 48 poorest COUNTRIES. Moreover, corporate executives are unaccountable even to their own shareholders; how, she wondered aloud, can tipping the balance of power even further in their favor produce a juster world?

The most electric and, arguably, most productive exchange took place between Cosman and Elizabeth. After noting acidly (albeitly correctly) that Elizabeth had provided an overly long answer to a fairly straightforward query, Cosman went on to enquire as to how Canada could reap the benefits promised by the MAI without incurring the costs which Elizabeth had warned of (e.g. investor-state lawsuits).

Since, in framing her question, Cosman had made reference to the presumed difficulty of establishing international labor and environmental standards, Elizabeth first addressed this aspect. Elizabeth noted that in fact these standards are already being inscribed in treaties. However, they are degraded ones - as they are bound to be in covenants that take as a given that aught that hinders international trade is ipso facto illegitimate.

Thus having disarmed her interlocutor Elizabeth pressed the advantage of her position by putting paid to the suggestion that any possible advantage could accrue to Canada via the MAI. She noted that Canada's International Trade Minister Sergio Marchi had as much as said so himself. It is not Canada, Elizabeth stated, but perhaps a handful of major Canadian companies which could conceivably profit from the MAI.

Building upon the foregoing Elizabeth's peroration introduced the concept of a very different kind of investment treaty. Instead of looking at how to free up capital flows Elizabeth argued that it is past time to regulate them - or at least so-called "hot money" - by means of an international tax on currency transactions such as that proposed by US economist James Tobin. When Elizabeth revealed that Sergio Marchi and even Paul Martin had shown interest in a Tobin Tax Cosman - "deserted" by her federal colleagues - was reduced to muttering that she hoped the Chair would bring in a spokesperson for the other side of the matter. Fred McMahon from AIMS, maybe?


Index of acronyms :

AIMS - Atlantic Institute for Market Studies
GNP-Gross National Product
MAI-Multilateral Agreement on Investment
MLA-Member of the Legislative Assembly
NAFTA-North American Free Trade Agreement
NDP-New Democratic Party
OECD-Organization for Economic Co-operation and Development
PC-Progressive Conservative
UNCTAD-United Nations Conference on Trade and Development
WTO-World Trade Organization