David Orchard
Articles by David Orchard
  Contacts Schedule What You Can Do ! Home Français

Thunder Bay Chronicle Journal, June 9, 1997

We must withdraw from NAFTA

by David Orchard

Amid a deafening political silence, successor agreement to NAFTA, the Multilateral Agreement on Investment (MAI), is being negotiated in Paris by the Organization for Economic Cooperation and Development (OECD).

The leaked 140 page draft states that each nation must treat foreign corporations at least as favourably as domestic companies (national treatment). No country "may impose, enforce or maintain" any requirement on a foreign-owned corporation to purchase any domestic goods or services, to achieve any level of domestic content or ownership, to hire anyone locally or, indeed, to achieve any level of employment, investment, research or development in, or transfer any technology or knowledge to, the host country.

Each country, however, "shall ensure" that all returns, capital, proceeds or profits may be freely transferred "in and out of any territory without delay ... in a freely convertible currency."

Although citizens and their governments are prohibited from placing requirements on foreign corporations, taxpayers of each country are required to provide "full and constant protection and security" to foreign investors and their investments.

Crown corporations, referred to as "government monopolies," must act "solely in accordance with commercial considerations."

A section called "Investor-State Procedures" gives foreign corporations the right to sue national governments for any measure which "causes or is likely to cause loss or damage to an investor or his investment" or even for "a lost opportunity to profit from a planned investment."

"Standstill" and "rollback" proposals would prohibit a country from passing any new laws which do not conform with the MAI, and require all existing non-conforming laws of each country to be listed in an annex. "Rollback" is described as "the liberalization process by which the reduction and eventual elimination of all non-conforming measures to the MAI will take place. It is a dynamic element linked with standstill which... would produce a 'ratchet effect' where any new liberalization processes would be 'locked in' so they could not be rescinded or nullified over time." Possible ways to achieve rollback include a phaseout or "sunset" clauses on all "non-conforming measures" and then "periodic examination of non-conforming measures" leading to "removal or limitation."

Regulations limiting foreign ownership of Canada's banks, media, farmland, airlines, the existence of medicare, public education, the Canadian Wheat Board and the CBC are all "non-conforming measures," subject to "phaseout." This agreement grants foreign investors greater rights by law than Canadian citizens. It means elected governments in Canada agree in advance to place the interests of foreign investors first regardless of the will of the population, as expressed in elections or any other way. The implications for democracy, the environment, employment, human dignity and national sovereignty, are profound.

Canada has already given these rights to U.S. corporations under (NA)FTA, triggering a drastic increase in American control of all aspects of our economy and society. MAI extends the investment chapter of NAFTA to give the same rights to corporations from all 29 OECD other countries.

Under NAFTA Canada can at any time give six months' notice and withdraw from the agreement without penalty. The terms of the MAI, however, lock in for twenty years.

In the 1993 election, the Liberals promised to renegotiate or cancel both the FTA and NAFTA, which they had opposed since 1988. They did neither.

Today virtually all government and corporate decisions are being driven by, and made compatible with, (NA)FTA. The undermining of Canada's health care system is a direct result of FTA rights given to private U.S. health corporations. Likewise, (NA)FTA has led to the unprecedented stripping of our precious non-renewable resources, accelerated environmental destruction and an assault on our national infrastructure. Before the FTA, Canada's unemployment level was equal to that in the U.S. Now it is twice the U.S. rate, with no improvement in sight.

Yet no major political party is calling for Canada's withdrawal from NAFTA.

(Reform, the Conservatives and the Bloc support the Liberals on MAI, as they do on (NA)FTA. The NDP now accepts NAFTA but opposes MAI -- thus condoning U.S. control of Canada but not corporate control from other countries.)

Back in the 1980's, when the U.S. couldn't impose its will on GATT, the world trade body, it pursued bilateral agreements -- with Israel first, then Canada, where in 1988, a compliant Brian Mulroney signed the Canada- U.S. FTA. The FTA, now expanded to NAFTA, is the precedent the U.S. is using as a sledge-hammer to obtain those rights for its corporations, first in the rich OECD countries and then worldwide.

Third World countries are already being threatened with trade action for refusing to go along with the agreement which, in the words of Bhagirath Lal Das, India's former negotiator to GATT, "will give foreign investors total rights without responsibilities."

By allowing itself to be used as a patsy in these so called free trade agreements, Canada gives U.S. corporate demands a legitimacy and force around the world they could not otherwise achieve.

Instead of extending NAFTA, Canada must withdraw from it before the border below us is erased along with four centuries of our history -- and build a domestically controlled economy as other successful nations have done. END

NB: The MAI negotiations were abandoned in October, 1998 after France withdrew concerned that the agreement would favour foreign corporations over the rights of national governments and domestic investors. The European parliament had previously voted 437 to 8 calling on "parliaments and governments of the Member States not to accept the MAI as it stands."

David Orchard is the author of The Fight for Canada - Four Centuries of Resistance to American Expansionism and was runner-up to Joe Clark in the 1998 federal Progressive Conservative leadership contest. He farms in Borden, SK and can be reached at tel (306) 664-8443 or by e-mail at davidorchard@sasktel.net

Back Top