DEVELOPMENT-FINANCE: Proposed Investment Pact Under Fire

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Feb 14 1998 (IPS) - A proposed Multilateral Agreement on Investment (MAI), discussions on which will enter a decisive stage next week in Paris, has become the target of unprecedented attacks launched from a broad range of sectors worldwide.

The sharpest criticism alludes to the secrecy surrounding negotiations of the accord in the Paris headquarters of the Organisation of Economic Cooperation and Development (OECD). The MAI will surely not pass the “Dracula test” – its contact with light will be fatal, said a representative of the U.S. consumers group Public Citizen.

The world’s richest countries, which comprise the OECD, joined by Argentina, Brazil, Chile, Hong Kong and Singapore, are drawing up the MAI, a pact designed to make it easier for investors to move assets across international borders.

The French government and intellectuals have objected to the articles of the draft which they say contradict traditional French positions in defence of cultural autonomy threatened by the invasion of foreign investment.

France’s Finance Minister Dominique Strauss-Kahn said an international accord on investment must not give a boost to extraterritorial laws, like the U.S. Helms-Burton Act designed to sanction foreigners doing business with Cuba.

Brent Blackwelder, the president of the Washington-based Friends of the Earth, said “the 29 wealthiest nations of the world are negotiating an economic agreement that will give foreign investors power over national, state and local governments globally.”

Friends of the Earth and other members of a coalition of U.S. and Canadian environmental groups contend that the proposed accord “would guarantee foreign corporations legal power to circumvent environmental and other laws,” in the words of Blackwelder.

People’s Global Action (PGA), the coordinator of an international movement against economic globalisation, accuses the MAI of aiming to eliminate every last trace of regulation and control of capital flows.

The PGA plans to launch a non-violent civil disobedience movement against free trade and the World Trade Organisation (WTO). The campaign also begins next week in Geneva, with a series of press conferences leading up to a Feb. 23-25 international seminar.

A previous PGA statement said the countries of the industrialised North were pushing for approval of the MAI in their aim to extend the rights already enjoyed by foreign investors in most countries.

According to the PGA, the MAI represents the most significant attempt to expand the process of globalisation and liberalisation to “abolish the power and legitimate and sovereign right of states and peoples to determine their own economic and social policies.”

The MAI suggests that host countries should protect investors by putting a ban on the seizure of companies’ assets without compensation, and lift restrictions on return of profits to other countries. If a member government failed to comply with the terms of the pact, the corporation affected would be able to seek redress in a novel investor-state dispute panel

Negotiators meet next week in Paris to assess progress on the MAI, with a view towards signing a final accord at the OECD ministerial meeting in April.