NGOs gear up for anti-MAI campaign

by Roberto Bissio  

WASHINGTON: With a press conference in Ottawa and a letter- writing campaign to US congressmen opposing "fast-track", NGOs in Canada and the United States have started a movement to mobilize public opinion against the Multilateral Agreement on Investment (MAI) currently being negotiated among the Organization for Economic Cooperation and Development (OECD) countries in Paris.

Criticism on lack of transparency

Also, in Paris, at the end of October (26-28 October), some 50 NGOs from 26 countries voiced strong criticism about the lack of transparency in these negotiations and demanded an independent assessment of the social and environmental impact of the MAI before negotiations continue.

The NGOs had met the OECD Secretary-General and the negotiators of the MAI, during a consultation meeting. The OECD official told the NGOs that, as a cornerstone of the globalization process, MAI would foster a process leading to "the elimination of poverty, misery and disease around the world in the next two decades".

Neither the OECD officials nor member governments were able to cite any evidence to back such an optimistic prediction. But they insisted that they "believe" this would happen, since their "instinct" tells them so.

An African NGO representative told the governments that similar allegations were made when structural adjustment started on their continent, and again when the Uruguay Round of trade negotiations was being completed. However, the Africans are poorer then before.

The MAI will be open for signature by developing countries once the drafting is completed. At least five non-members of the OECD have expressed their interest and are being allowed as observers in the negotiation process: Argentina, Brazil, Chile, Slovenia and Hong Kong, China.

Development NGOs following the negotiations under way between European Community and the African, Caribbean and Pacific (ACP) countries for a renewed Lom‚ Convention met at the end of October in Kampala, Uganda and reported that the ACP countries are being pressured to accept the MAI as part of the new agreement.

Asked during the consultations in Paris whether the Asian members of the OECD would have been in a condition to be part of that select "club" of developed countries if the MAI rules had been in effect 30 years ago, an Asian representative said "no, we would never have industrialized under these rules and the MAI is not meant for the poor countries but only for those who have reached a certain stage in their development".

"High quality" agreement

Notwithstanding this, a document distributed by the business lobby at the OECD, stated that the objective of business is to have as "many non-member countries signing the agreement". Asked about the logic of negotiating a treaty behind closed doors among a group of 28 countries, and then to have it signed on to later by dozens more, the negotiators said that they chose that approach in order to have a "high quality" agreement.

Southern NGOs protested as offensive, the affirmation by an European government delegate that "many developing countries just cannot cope with or even understand the rules of the present hundreds of bilateral investment agreements".

The negotiators rejected the demand of NGOs that the process be delayed to allow for proper research and public consultations about the impact of the MAI and committed themselves to have a text ready by the time of the OECD ministerial meeting in April 1998. But the current text has brackets on most key paragraphs and there are 600 pages of reservations submitted by different countries that still need to be negotiated.

The negotiators explained to the NGOs their efforts to start a "top-down" approach to liberalization , as opposed to the GATT-WTO "bottom-up" method.

While in the GATT the discussions on lowering tariffs and other barriers to trade go step by step, product by product or sector by sector, with the countries making concrete liberalization "offers", the MAI affects all areas of the economy and defines investment in a very broad way. Any exemption will have to be listed by the signing governments as "reservations" and no provisions have yet been agreed for allowing a country to add any additional reservations after it has signed. Countries will not be allowed to withdraw from the agreement in the first five years after its signature and all commitments made under it would last for at least 15 years.

The arbitration mechanism provided by the MAI which allows corporations to sue governments in a binding international tribunal and the "expropriation" rules that could lead to a government having to pay compensation to firms that have not yet established themselves in the country were strongly opposed by the NGOs taking part in the consultation with the OECD. (Third World Economics No. 174, 1-15 December 1997)

Roberto Bissio is the Executive Director of the Instituto Del Tercer Mundo, Uruguay.