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
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not be rescinded or nullified over time."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,
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
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
(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
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 email@example.com