On free trade, the rights of multinationals and the dilemma of the State: Difference between revisions

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On free trade, the rights of multinationals and the dilemma of the State: "The FTAA is a stronger MAI, and Canada is letting it happen."
On free trade, the rights of multinationals and the dilemma of the State: "The FTAA is a stronger MAI, and Canada is letting it happen."
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"By trying to win it all, large private companies are making class struggles reappear."
"By trying to win it all, large private companies are making class struggles reappear."
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International free trade expends in the world as intranational free trade was established inside each country, a long time ago.
International free trade expends in the world as intranational free trade was established inside each country, a long time ago.


The role of the GATT
==The role of the GATT==


The movement begins in 1947, with the creation of the GATT. The depression of the Thirties and the Second World War left us with very high barriers to trade; commercial reprisals had ?ransacked? commercial movements. The objective of the GATT is simple: to gradually lower tariffs and to gradually remove quotas on imports. The privileged instrument to reach these ends is also simple: the reduction to trade barriers given by a member State to another member State is automatically granted to all the other members. This is the clause of the most favoured nation. As nobody will authorize a reduction on a product without obtaining, on the other hand, a reduction on another product, the negotiations of the GATT become a kind of immense fair where its members exchange reductions which are automatically extended to all.
The movement begins in 1947, with the creation of the GATT. The depression of the Thirties and the Second World War left us with very high barriers to trade; commercial reprisals had ?ransacked? commercial movements. The objective of the GATT is simple: to gradually lower tariffs and to gradually remove quotas on imports. The privileged instrument to reach these ends is also simple: the reduction to trade barriers given by a member State to another member State is automatically granted to all the other members. This is the clause of the most favoured nation. As nobody will authorize a reduction on a product without obtaining, on the other hand, a reduction on another product, the negotiations of the GATT become a kind of immense fair where its members exchange reductions which are automatically extended to all.
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The negotiations became more sophisticated than the former bilateral exchanges. And the fields of application more numerous. Whereas the first negotiations normally had to do with products, we started to liberalize services (financial, transportation, data processing, commercial, etc). But one does not provide a service of insurance, financing, or consultation as one moves an oil barrel. One usually needs a local establishment. The company which sought to establish itself in a foreign country wanted to be treated like a local company. The clause of national treatment appeared.
The negotiations became more sophisticated than the former bilateral exchanges. And the fields of application more numerous. Whereas the first negotiations normally had to do with products, we started to liberalize services (financial, transportation, data processing, commercial, etc). But one does not provide a service of insurance, financing, or consultation as one moves an oil barrel. One usually needs a local establishment. The company which sought to establish itself in a foreign country wanted to be treated like a local company. The clause of national treatment appeared.


The objective of multinationals
==The objective of multinationals==


Why limit the application of this clause to services? It would have to apply, some said, to all foreign investments. Why would a country agree to let in the franchise of a foreign steel company and not agree to offer national treatment to the company that wanted to build a steel factory?
Why limit the application of this clause to services? It would have to apply, some said, to all foreign investments. Why would a country agree to let in the franchise of a foreign steel company and not agree to offer national treatment to the company that wanted to build a steel factory?
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The International Chamber of Commerce embraces this vision with enthusiasm and the pressures became increasingly strong so that, in the conflicts that such a vision would not fail to cause, a company could sue a government in front of an international court and obtain financial compensations from them for the profits lost because of the policies pursued by this government. Vast program!
The International Chamber of Commerce embraces this vision with enthusiasm and the pressures became increasingly strong so that, in the conflicts that such a vision would not fail to cause, a company could sue a government in front of an international court and obtain financial compensations from them for the profits lost because of the policies pursued by this government. Vast program!


The Canado-American Treaty
==The Canado-American Treaty==


At the end of the Eighties, the American Congress becomes very protectionist. The bills to limit the importation of such and such product multiplied. The list ended up reaching more than 200 proposals. As the principal supplier of the United States, Canada was directly aimed. That only a few of these projects be adopted and Canada would be exposed to a serious recession. The White House, conscious of the danger, wins the Congress by proposing a free trade area to Canada. Mr. Mulroney accepts. Ontario, which greatly benefitted from the installation of American branches, sheltered by the Canadian tariff, is against. In Québec, the Prime Minister Robert Bourassa would be rather for but hesitates. The official opposition, the Parti Québécois, would be rather against but hesitates. An agreement between the two political parties made it so that the non-partisan support of Québec to Mr. Mulroney gave him the political force to conclude. Under the influence of the Ontario labour unions, the labour unions of Québec were against, but the most important labour union in the private sector, the Metal-workers, will refuse, in the name of the interest of its members, to align itself on Ontario's fears. The game was won.
At the end of the Eighties, the American Congress becomes very protectionist. The bills to limit the importation of such and such product multiplied. The list ended up reaching more than 200 proposals. As the principal supplier of the United States, Canada was directly aimed. That only a few of these projects be adopted and Canada would be exposed to a serious recession. The White House, conscious of the danger, wins the Congress by proposing a free trade area to Canada. Mr. Mulroney accepts. Ontario, which greatly benefited from the installation of American branches, sheltered by the Canadian tariff, is against. In Québec, the Prime Minister Robert Bourassa would be rather for but hesitates. The official opposition, the Parti Québécois, would be rather against but hesitates. An agreement between the two political parties made it so that the non-partisan support of Québec to Mr. Mulroney gave him the political force to conclude. Under the influence of the Ontario labour unions, the labour unions of Québec were against, but the most important labour union in the private sector, the Metal-workers, will refuse, in the name of the interest of its members, to align itself on Ontario's fears. The game was won.


And yet, the interest of Québec was clear. What creates jobs here, are less the branches of American companies than indigenous small to medium businesses. For them, the lifting of the American tariffs was a gift from heaven. Their exports to the South were going to explode. Never again could English Canada blackmail the sovereignists as it had done since so many years: if you leave, we will no longer buy your products. Canada ceased to be the largest market for Québec; it was now the United States. To remove a sovereign Québec from the recently created free trade area? Difficult, very difficult, since, after the extension to Mexico, the United States were aiming for the FTAA.
And yet, the interest of Québec was clear. What creates jobs here, are less the branches of American companies than indigenous small to medium businesses. For them, the lifting of the American tariffs was a gift from heaven. Their exports to the South were going to explode. Never again could English Canada blackmail the sovereignists as it had done since so many years: if you leave, we will no longer buy your products. Canada ceased to be the largest market for Québec; it was now the United States. To remove a sovereign Québec from the recently created free trade area? Difficult, very difficult, since, after the extension to Mexico, the United States were aiming for the FTAA.
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All things considered, the Canado-American Free Trade Agreement ensured an important liberalization of exchanges but did not throw the baby out with the water of the bath. Governments kept the possibility of exerting a structuring action and culture was clearly recognized as a general exception.
All things considered, the Canado-American Free Trade Agreement ensured an important liberalization of exchanges but did not throw the baby out with the water of the bath. Governments kept the possibility of exerting a structuring action and culture was clearly recognized as a general exception.


NAFTA
==NAFTA==


The slip began with NAFTA. The Canado-American Agreement had come into effect in 1989. For NAFTA, it was 1994. American investors are wary of the behavior of Latin American governments. They want rock-solid protections. Neoliberalism is raging. The governments of the Soviet kind are gone. The great search for foreign investment is everywhere. Governments will yield. Investors will have their obligatory international arbitration for governments.
The slip began with NAFTA. The Canado-American Agreement had come into effect in 1989. For NAFTA, it was 1994. American investors are wary of the behaviour of Latin American governments. They want rock-solid protections. Neoliberalism is raging. The governments of the Soviet kind are gone. The great search for foreign investment is everywhere. Governments will yield. Investors will have their obligatory international arbitration for governments.


It is not obvious if the Canadian government saw the extent of what it signed. It is true that the Mexican government caused a lot of mistrust. And the arbitration clause seemed so logical in order to encourage foreign investment in Latin America. When the American company Ethyl sued Canada on the basis of the NAFTA provisions, the alarm clock was brutal.
It is not obvious if the Canadian government saw the extent of what it signed. It is true that the Mexican government caused a lot of mistrust. And the arbitration clause seemed so logical in order to encourage foreign investment in Latin America. When the American company Ethyl sued Canada on the basis of the NAFTA provisions, the alarm clock was brutal.


For the remainder, however, and particularily for the general exceptions, the clauses of the Canado-American agreement, as a whole, were maintained. The cultural exemption remained, but as a clause of the American agreement rather than as a clause of NAFTA. It is not indifferent to what followed.
For the remainder, however, and particularly for the general exceptions, the clauses of the Canado-American agreement, as a whole, were maintained. The cultural exemption remained, but as a clause of the American agreement rather than as a clause of NAFTA. It is not indifferent to what followed.
The MAI
The MAI


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Another attempt will come with the meeting of WTO in Seattle but demonstrators will prevent the meeting from taking place.
Another attempt will come with the meeting of WTO in Seattle but demonstrators will prevent the meeting from taking place.


The FTAA
==The FTAA==


The next occasion was the meeting on the FTAA in Quebec. In this case still, an leak on the Internet revealed the content of the chapter of the FTAA which deals with foreign investment. The responsibility, this time, is that of the Institute for Agriculture and Trade Policy.
The next occasion was the meeting on the FTAA in Quebec. In this case still, an leak on the Internet revealed the content of the chapter of the FTAA which deals with foreign investment. The responsibility, this time, is that of the Institute for Agriculture and Trade Policy.


Reading this text, we soon realize that it is a new attempt at writing, for the three Americas, a great charter of the rights of multinationals. It is a stronger MAI, if that is possible. The rights of the gouvernments are even more reduced, more diluted than they already were in the MAI.
Reading this text, we soon realize that it is a new attempt at writing, for the three Americas, a great charter of the rights of multinationals. It is a stronger MAI, if that is possible. The rights of the governments are even more reduced, more diluted than they already were in the MAI.


When reading the text, we can see that it is a new attempt at writing, for three Americas, a great charter of the rights of the multinationals. It is a harder MAI, if that is possible. The rights of the governments are reduced, more edulcorated than they were it in the MAI.
When reading the text, we can see that it is a new attempt at writing, for three Americas, a great charter of the rights of the multinationals. It is a harder MAI, if that is possible. The rights of the governments are reduced, more edulcorated than they were it in the MAI.


The negotiation was secret. The Group of negotiations on investment sat on five occasions during the year 2000. It submited a report to the ministers responsible for trade after their meeting of November 27 to 29. It is the text of their report that we have. It was discussed again during the Committee of trade negociations held in Lima, in Peru, in January 2001. We do not know what occurred there. All that we know, it is that the Quebec Summit, which was supposed to deal with the free trade agreement, dealt with democracy instead; it is interesting, but it is not what the initial objective of the conference was supposed to be.
The negotiation was secret. The Group of negotiations on investment sat on five occasions during the year 2000. It submited a report to the ministers responsible for trade after their meeting of November 27 to 29. It is the text of their report that we have. It was discussed again during the Committee of trade negotiations held in Lima, in Peru, in January 2001. We do not know what occurred there. All that we know, it is that the Quebec Summit, which was supposed to deal with the free trade agreement, dealt with democracy instead; it is interesting, but it is not what the initial objective of the conference was supposed to be.


The majority of governments on our continent seek to get as much investment as possible. They look at what Mexico obtain with NAFTA and they drool. Brazil, whose population is close to 180 million inhabitants, whose industrial development makes it the leader of Latin America and created the Mercosur, is nevertheless hesitant even though its economy develops quickly. Argentina, which is going through a serious economic crisis, is ready to accept anything.
The majority of governments on our continent seek to get as much investment as possible. They look at what Mexico obtain with NAFTA and they drool. Brazil, whose population is close to 180 million inhabitants, whose industrial development makes it the leader of Latin America and created the Mercosur, is nevertheless hesitant even though its economy develops quickly. Argentina, which is going through a serious economic crisis, is ready to accept anything.


M. Pettigrew, Canadian minister of International, promised that the FTAA agreement did not contain the most controversial clauses of the NAFTA agreement and that, in particular, that of the obligated arbitration imposed to private corporations. He is not denying that the object of the leak in the media is authentic. He only tries to indicate that this document was a draft and that Canada has not yet taken its decision on the matter. Ater the five meetings of the Group of negociations on investment in 2000? Not even after the meeting of Lima? You have to take people for imbeciles to declare something like that. In fact, as with the case of the MAI, Canada was impressed by the importance of the issue and decided to let it pass. "Laisser faire, laisser passer." Not only do we give no opposition to the sea, we are not even trying of buidling dams.
M. Pettigrew, Canadian minister of International, promised that the FTAA agreement did not contain the most controversial clauses of the NAFTA agreement and that, in particular, that of the obligated arbitration imposed to private corporations. He is not denying that the object of the leak in the media is authentic. He only tries to indicate that this document was a draft and that Canada has not yet taken its decision on the matter. Ater the five meetings of the Group of negotiations on investment in 2000? Not even after the meeting of Lima? You have to take people for imbeciles to declare something like that. In fact, as with the case of the MAI, Canada was impressed by the importance of the issue and decided to let it pass. "Laisser faire, laisser passer." Not only do we give no opposition to the sea, we are not even trying of building dams.


And the Government of Québec can't do anything by proclaim the presence of Québec, its existence, and the nature of its interets. It is doing that quite well.
And the Government of Québec can't do anything by proclaim the presence of Québec, its existence, and the nature of its interests. It is doing that quite well.


Thank God for the existence of the so-called "civile society". That is the conjugaison of various labour unions, students, political activists in need for a cause, the Monde diplomatique and a few old-style liberals (in the original sens of the word) such as myself, who wish to establish something resembling an acceptable balance, to assert that there is a life beyond multinational corporations and their interests and that the State must not abdicate on its responsabilities.
Thank God for the existence of the so-called "civile society". That is the conjugaison of various labour unions, students, political activists in need for a cause, the ''Monde diplomatique'' and a few old-style liberals (in the original sense of the word) such as myself, who wish to establish something resembling an acceptable balance, to assert that there is a life beyond multinational corporations and their interests and that the State must not abdicate on its responsibilities.


Conclusions
==Conclusions==


I conclude with some observations on the debates around the Québec Summit.
I conclude with some observations on the debates around the Québec Summit.


- Had it not been for the finale declaration of the Peoples Summit of the Americas, we should salute one more time the revealing role of those who call themselves, pompeusement, civil society. Some claimed their method of action was undemocratic. It certainly is not less democratic than that of the Americas Business Forum, which was granted an official consultative status by the head of states and governments; neither less democratic than the admission of business people to the negociation tables. We we have no access to the meetings rooms nor to the reports, the only place left is the street.
- Had it not been for the finale declaration of the Peoples Summit of the Americas, we should salute one more time the revealing role of those who call themselves, pompeusement, civil society. Some claimed their method of action was undemocratic. It certainly is not less democratic than that of the Americas Business Forum, which was granted an official consultative status by the head of states and governments; neither less democratic than the admission of business people to the negotiation tables. We we have no access to the meetings rooms nor to the reports, the only place left is the street.


- Québec is in a délicate situation and a potentially dangerous one. Kept asside from the negociations, it is not truly aware of what is going on. To erect a public sign in front of the meeting place to signal who we are has something pathetic to it. It probably had to be done, no doubt, but we can't escape the thought that short of 52 000 votes, Québec would have participated to the meetings along with other countries much smaller than itself.
- Québec is in a delicate situation and a potentially dangerous one. Kept asside from the negociations, it is not truly aware of what is going on. To erect a public sign in front of the meeting place to signal who we are has something pathetic to it. It probably had to be done, no doubt, but we can't escape the thought that short of 52 000 votes, Québec would have participated to the meetings along with other countries much smaller than itself.


Some are saying that since a sovereign Québec would only be a fraction of today's Canada, it would have little influence on the direction of these meetings. It is not so. It would be a progress. And by the way, the little importance of the small countries in international negociations does not correspond to reality.
Some are saying that since a sovereign Québec would only be a fraction of today's Canada, it would have little influence on the direction of these meetings. It is not so. It would be a progress. And by the way, the little importance of the small countries in international negotiations does not correspond to reality.


- We can be in favor of free-trade and at the same time refuse the course that neoliberalism is trying to impose. We can recognize the merits of a free market economy without wanting to impose the domination of great multinational corporations whose interests often coincide with the common interest but not always and not necessarily.
- We can be in favour of free-trade and at the same time refuse the course that neoliberalism is trying to impose. We can recognize the merits of a free market economy without wanting to impose the domination of great multinational corporations whose interests often coincide with the common interest but not always and not necessarily.


- By trying to win it all, great multinationals are in the process of making a class war reappear. On voit maintenant se répandre la crainte, la suspicion et la confrontation. Les gouvernements ont leur part de responsabilité en laissant s'accréditer l'impression qu'entre politique et affaires, il y a plus que collaboration, il y a collusion.
- By trying to win it all, great multinationals are in the process of making a class war reappear. On voit maintenant se répandre la crainte, la suspicion et la confrontation. Les gouvernements ont leur part de responsabilité en laissant s'accréditer l'impression qu'entre politique et affaires, il y a plus que collaboration, il y a collusion.


Jacques Parizeau
Jacques Parizeau
Former Prime Minister of Québec
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