[PEN-L:708] AFL-CIO executive council statement on the MAI (fwd)
Forwarded message: Delivered-To: [EMAIL PROTECTED] Delivered-To: [EMAIL PROTECTED] Date: Tue, 27 Oct 1998 14:16:40 -0800 To: [EMAIL PROTECTED] From: Sid Shniad [EMAIL PROTECTED] Subject: AFL-CIO executive council statement on the MAI X-UID: 1569 AFL-CIO Executive Council October 14, 1998 Statement MULTILATERAL AGREEMENT ON INVESTMENT (MAI) Since 1995, the U.S. government has been leading an effort by 29 of the world's richest nations to negotiate a Multilateral Agreement on Investment (MAI). Negotiated under the auspices of the Organization for Economic Cooperation and Development, the MAI was scheduled to be completed in April of 1998. Growing popular opposition forced a temporary suspension of negotiations, which are scheduled to resume in October 1998. The principle objective of the MAI is to strengthen and expand international rules that elevate the mobility of capital and the rights of investors above all other considerations. In this system, worker rights, environmental protection, and necessary government regulation of the economy take a back seat to the interests of private capital. The AFL-CIO rejects this model as irredeemably flawed, harming workers across the globe, while enriching the financial sector. At a time when the current system is increasingly being questioned, it is folly to lock in rules that only serve to perpetuate this system. Unpredictable and uncontrollable capital flows have created turmoil in the global economy. The sudden outflow of investment funds has undone years of growth in a matter of moments, leading to economic meltdowns in Mexico in 1994-95, in Thailand, South Korea, Indonesia, and Malaysia in 1997-98, and in Russia this year. The conventional wisdom that countries should respond to such crisis with austerity and export-led growth exacerbates the problem of weak global demand. The U.S. economy suffers the impact of the international crisis in import-competing markets like steel, auto, apparel and electronics; in the loss of export markets; and in all the industries and activities that support these sectors. We are at an important historic turning point. The expert wisdom of a few years ago -- that a deregulated world market would create prosperity for all -- is now discredited. We have an opportunity to rethink and reshape the rules of the global economy. We should ensure that the global economy of the future is one built on a solid foundation of democratic, sustainable, and egalitarian growth, not unlimited profit for a few corporate giants. The model of globalization promoted by the MAI underlies many of the problems in the world economy. The AFL-CIO rejects the MAI as flawed in both model and design. We will oppose this and any similar set of rules in the OECD, the World Trade Organization, the International Monetary Fund, or any other forum. The problems with the draft of the MAI include: Labor Rights -- The labor rights provisions in the MAI are unacceptable, consisting only of weak hortatory language that imposes no effective penalties for violation of internationally recognized labor rights and no meaningful obligation to enforce existing laws. Expropriation and Compensation -- The MAI grants extraordinary rights to corporations, protecting them from government action that might reduce the value of their investments. Using broad definitions of investor rights, these rules would empower corporations and investors to demand cash damages for any government action that has the "equivalent effect" of an "indirect expropriation." National Treatment - The MAI requires governments to treat foreign investors "no less favorably" than domestic investors. This principle is at odds with some legitimate domestic political and economic objectives, such as preserving jobs or protecting natural resources. Performance Requirements - The MAI restricts governments' ability to impose restrictions on foreign investors. For example, governments may not require foreign investors to give preference to domestic inputs, achieve a given level of domestic content, or hire local citizens. These measures are important tools for local economic development, and the decision whether or not to use them should be one made by democratic process, not an international agreement. Most Favored Nation - The MAI requires governments to give the same favorable treatment to all investors. That means that federal, state and local governments cannot differentiate between companies from countries that don't comply with international labor or human rights standards and those that do. Investor-to State Dispute Resolution - The MAI grants individual corporations the right to sue governments when they believe their rights under the agreement have been violated. This opens the possibility of exposing governments to potentially large liabilities, forcing
Statement on the MAI
Date: Tue, 27 Jan 1998 From: Andrea Durbin [EMAIL PROTECTED] In the next few weeks, the political representatives for the OECD countries will be meeting (the week of February 16th) to decide whether to: a) proceed with the negotiations for the MAI or b) to scrap the agreement altogether. Groups around the world are gearing up to increase the pressure nationally and internationally that the MAI should be dropped. Below is a joint NGO statement that was released in Paris during the NGO consultation meeting with the OECD last October. We are asking groups to endorse this statement so that we can re-release it internationally with more signatures the week of February 9th. If your organization can endorse this statement, please send me your ORGANIZATION NAME AND COUNTRY by Friday, February 6th. Also, please circulate this message broadly to other networks you work with. Thanks in advance for your help. Keep up the fight against the MAI. Its defeat could be the next blow to the globalization agenda! Regards, Andrea Durbin, Friends of the Earth, US * JOINT NGO STATEMENT ON THE MULTILATERAL AGREEMENT ON INVESTMENT (MAI) NGO/ OECD Consultation on the MAI Paris: 27 October, 1997 INTRODUCTION As a coalition of development, environment and consumer groups from around the world, with representation in over 70 countries, we consider the draft Multilateral Agreement on Investment (MAI) to be a damaging agreement which should not proceed in its current form, if at all. There is an obvious need for multilateral regulation of investments in view of the scale of social and environmental disruption created by the increasing mobility of capital. However, the intention of the MAI is not to regulate investments but to regulate governments. As such, the MAI is unacceptable. MAI negotiations began in the OECD in the Spring of 1995, more than two years ago, and are claimed to be substantially complete by the OECD. Such negotiations have been conducted without the benefit of participation from non-OECD countries and civil society, including non-governmental organizations representing the interests of workers, consumers, farmers or organizations concerned with the environment, development and human rights. As a result, the draft MAI is completely unbalanced. It elevates the rights of investors far above those of governments, local communities, citizens, workers and the environment. The MAI will severely undermine even the meagre progress made towards sustainable development since the Rio Earth Summit in 1992. The MAI is not only flawed in the eyes of NGOs, but conflicts with international commitments already made by OECD member countries: The MAI fails to incorporate any of the several relevant international agreements such as the Rio Declaration; Agenda 21; UN Guidelines for Consumer Protection (1985); the UNCTAD Set of Multilaterally Agreed Principles for the Control of Restrictive Business Practices (1981); and the HABITAT Global Plan of Action. The MAI fails to comply with OECD commitments to integrate economic, environmental and social policies (1). The MAI removes responsibilities on transnational enterprises which were previously agreed by the OECD under the OECD Guidelines for Multilateral Enterprises 1976 (2). The exclusion of developing countries and countries in transition from the negotiations is inconsistent with OECD policy on development partnerships (3). Problems with the MAI stem both from the broad restrictions it places on national democratic action, and from its failure to include sufficient new systems of international regulation and accountability. As the MAI stands, it does not deserve to gain democratic approval in any country. All the groups signing this statement will campaign against its adoption unless changes, including those cited below, are incorporated into the body of the MAI. SUBSTANTIVE CONCERNS As drafted, the MAI does not respect the rights of countries - in particular countries in transition and developing countries - including their need to democratically control investment into their economies. The level of liberalisation contained in the MAI has already been opposed as inappropriate by many developing countries. However, non-OECD countries are under increasing pressure to join. There are differing investment and development needs of OECD and non-OECD countries. In particular, the potential for economic diversification and development of the developing countries - especially the least developed countries - and countries in transition would be severely undermined by the provisions of the MAI. The standstill principle would cause particular problems for countries in transition, many of which have not yet developed adequate business regulation. The MAI's withdrawal provision would effectively bind nations to one particular
