The New Cold War

Remarks of Ronnie Dugger, founder and co-chair, Alliance for Democracy, at Public Forum on the Multilateral Agreement on Investments

Texas AFL-CIO Building, Austin, December 3, 1997

The most astonishing opening fact about the Multilateral Agreement on Investments is that it is absolutely secret, that it hasn't been mentioned. I read the New York Times and the Wall Street Journal everyday and I've never seen the words "Multilateral Agreement on Investments" in either paper, nor any reference to a major undertaking of the OECD.

The Organization for Economic Cooperation and Development is not an agency of the United Nations. It is a quasi-private group representative of governments. It is a venue where governments meet and make plans. 27 of the richest nations in the world and two Third World nations -- South Korea and Mexico, which were recently added. This is the source for the Multilateral Agreement on Investments, which the United States has been actively negotiating in secret, behind closed doors in Paris for two years.

Public Citizen has been a great leader in putting information out, the Preamble Collaborative has been, but the original break came from the Third World Network when a person turned over to the Third World Network a copy of this treaty and it was finally put up on email in January 1997. So then we learned what the transnational corporations and the compliant rich governments of the world are planning for us.

This secretly concocted MAI treaty is all-out war by the transnational corporations on democracy itself. It is the second Cold War. This treaty would prohibit a nation's own democratic decisions about a nation's own economy, its environment, its workers, its working conditions, local content laws, local native employment percentage laws, percentage ownership limitations, and other national conditions upon the entry of foreign corporations.

We should never give up our right to pass national laws, state laws or local laws in our own interest, but if and when this treaty is adopted, that is exactly what we shall be doing.

GATT, NAFTA, the World Trade Organizations, steps along the road. MAI is the shoe dropping.

Sometimes I think of it in correlation with the arrogance of the major corporations in this country through what they were calling downsizing, because they have overreached their hand. In the MAI we have not only the naked display of the will to destroy democracy and rule by riches, which is now manifest in what has to be called an international corporate oligarchy. We also have a display of such arrogance and foolishness that I do believe that this is becoming an organizing principle for a worldwide revulsion.

Renato Ruggiero, the director general of the World Trade Organization, said in December 1996, "We are writing the constitution of a single, global economy." This is the law and the chains of one world corporate government, where everything must give way to corporate profits. You call this free trade. You call it growth of the international economy, you get people to debate on it about your assumptions and about your economistic thinking, because what you don't want them to notice is what you've put on the table for bargaining is democracy itself.

For decades the United Nations was working on an obvious problem most of us don't think much about -- we don't have time and purpose to think much about it. In the United States for a hundred years we've tried to regulate large corporations without much success. Antitrust is dead, the federal regulatory agencies are assumed to be largely factors of the corporations that they are supposed to be regulating in the industrial sectors. What about international trade? Well the United Nations naturally was curious. Shouldn't we have some international regulation? Don't we need some international antitrust? What about the conspiracies in restraint of trade that are active worldwide? So in 1978 they formed the Center on Transnational Corporations -- this is not the sort of coverage you get from daily newspapers or the network television. None of this will be known to you, I predict.

The Center on Transnational Corporations of the United Nations set about writing up rules for the behavior of transnational corporations in economic competition. In 1992, however, President Bush sent William Rogers to the United Nations and Rogers rapidly set about dismantling the Center on Transnational Corporations itself. The new rules on transnational corporations' behavior were to be adopted at the Rio Treaty Convention that year. Beforehand, the center was diffused and distributed to other agencies and that was the end of the United Nations. They closed up their shop on international economic regulation and gave up.

Meanwhile, through the World Trade Organization locus, there was an attempt to write a new treaty just for foreign investors, just for the international corporations and the individual foreign investors, but it ran head-on into the Third World resistance, particularly in Malaysia. They found they were not going to be able to get this treaty on the table through the United Nations without a terrific fight. That's when the work started in May of 1995 at the OECD with the United States in the lead. This is the United States' track to bring it about.

The key fact to me ... is that it authorizes nations to be sued by corporations. It lifts corporations to the par of the nation. The parties of the treaty are nations and corporations, as well as subnational units that might be sued by the corporations, and it empowers any transnational corporation or foreign investor to sue a foreign country on the grounds that they are discriminating against them in trade.

The representative from the United States Treasury Department in the debate in Boston made the statement when I made these representations in the debate that this will never happen: "We will never have the Deutschebank suing the Treasury of the United States." Well, as it happens, we have a precedent. In the NAFTA treaty -- you may have heard Jim Hightower say a couple days ago that MAI is NAFTA on steroids -- in the NAFTA treaty there were narrow, limited authorizations to let corporations sue governments. And under that treaty there are now several actions pending against governments by corporations as though corporations have some democratic rights to sue governments, which of course they don't.

Ethyl Corporation of the United States is suing the government of Canada for $350 million. What is the offense of the government of Canada? They passed a law banning a carcinogen from sale in Canada. It's an additive to gasoline that Ethyl likes to manufacture and sell and they were making a lot of money and since this was going to cost them money they are now suing Canada in the courts of Canada for $350 million. The petition of the Ethyl Corporation against the government of Canada alleges that among the offenses the Canadians have committed against the Ethyl Corporation is they had a debate in the Parliament about whether this antigen would be damaging to the public health of the citizens of Canada.

You need to hear the incredible characteristics of the Multilateral Agreement on Investments. This is something entirely new. This is authorizing corporations to have more rights than citizens, since of course citizens cannot sue governments, which enjoy sovereign immunity. ... Since about 20 years ago you had only 7,000 transnational corporations. Now we have about 40,000. That would give 40,000 corporations the power to sue the United States Treasury. ... This would be an enormous raid on the public treasury, on the taxpayer. People from the right or the left can be equally agitated about this. "No new taxes" is the slogan. What about a $350 million tax on the people of Canada to pay a damage claim from Ethyl Corporation? On ad infinitum.

The baldness and arrogance of coming forward with this MAI is difficult to parse. In fact, I was having a telephone conversation with Ralph Nader and we were agreeing that it can't pass if the people know what's in it. And what's astonishing is that they would try to pass it.

Pat Choate, the vice presidential candidate of Ross Perot, was one of the participants in the Boston conference sponsored by Public Citizen and the area alliances around Boston, and Choate got on the mike and said "Let me at this treaty ... Any treaty authorizing corporations to sue the Treasury? This is not a partisan matter at all. This will unite the country in the negative." And the question you have to ask is what is Bill Clinton eating for breakfast, that he'd ask us for it.

MAI would prohibit any use of national investment policy to advance human rights. On the environment, the only stand we have against the transnationals ravaging of the environment worldwide is nation-states that got up enough gumption to protect the environment. Under MAI that would be illegal if it differs from what is being done anywhere else in the world to the detriment of transnational corporations. ....

Maybe I could just give you one vivid example of what it would do. If we were to tax Deutschebank or Sony in some way that the corporation thought was tantamount to expropriation, then they would have a claim against us for a lawsuit for appropriating their property. It's an astonishingly outrageous proposition that they're going to bring to us.

Now the death of Fast Track is not necessarily killing MAI because the strategy that we became aware of, sotto voce, in the Congress through our own representative during that lobby against the Fast Track is that since they can't pass MAI on the head count in the House, they'll introduce it as a treaty.

Perhaps you don't understand the rawness of what Fast Track is. It's the deliberate and systematic violation of the American Constitution in order to pass trade treaties. The Constitution requires that two thirds of the Senate approve any treaty. What they're doing now with Fast Track is calling trade treaties agreements, insisting they're not treaties, they don't need two thirds of the Senate, then coming in without permitting the members to amend these agreements and passing them through the House and the Senate by simple majority. But they have started to follow the constitution as a gimmick because it's the only way to pass MAI.

I'd like to read a few paragraphs to you ... We've had transnational corporations for 450 years, but 20 years ago we had 7,000, now we have 40,000. The power of the major corporations is not just economic. It is mainly political, so no community and no country can have a working democracy which has large corporations in its politics. If we start there, then we can't idealize; we can't romanticize; we can't think we're governing ourselves if we have these large corporations running the government.

Communities will not stand without a worldwide rejection of corporate domination. We think the world is a world of nations, of communities, and the United Nations. We think it's a world of governments. But in fact governments are being destroyed at a rate the general population and most academics do not understand. The transfer of between $1.3 trillion and $2 trillion in transactions across national lines every day is all but invisible to national governments. Even if they knew what the transactions meant, they couldn't regulate them. National governments no longer control their own economies. And certainly communities can't control their own economies when we're building up international transnational corporations at this magnitude with freedom from any kind of regulation.

It's difficult for us to realize that the large corporations have suddenly formed a world government of the superpowerful. This world of giant corporations has already happened. The government can't protect us and won't protect us. All the governments are being recruited as enforcers for the transnational corporations.

The question is, in this system, who's the enemy of freedom? The corporation of course has generally told us that they're the champion of economic freedom but the fact is these transnational corporations are dedicated to the extermination of the small guy, of the small business. Dedicated to the domination of markets. They are in fact the enemies of freedom.

Beyond that look at the political structure of a corporation. Not thinking of it as economics but thinking of it as what it is dominantly now -- political control of the world and political control of the major nations, not to mention the minor ones. Well, it certainly isn't a democracy, is it, since there's no legitimation, no democratic vote on what corporations do?

It used to be a democratically controlled entity in the United States. The founders of this country new well enough what to do with corporations. They knew what a crown corporation was. They knew what the Hudson Bay Corporation had done or the East India Tea Company had done. We founded our country in a way where the corporations came out of the state and the states controlled them and ended them if they disobeyed the orders of the state on what they could and could not do. But 100 years ago they broke loose and here we have this situation where the corporation is dominated generally by a male, generally by one person, the CEO, all subalterns organized in a sphinxlike, downward descending pyramid.

What does that describe? Well, it's either communism or fascism. Well clearly it wouldn't be reasonable to call a system building an international aristocracy of the absurdly rich communist. Just 358 people, their combined total assets equal the combined total assets of 45 percent of the population on the face of the earth. So it has to be faced. We have to deal with the bad news. The way the world is going we are moving toward a fascist system that will be worldwide.

So the MAI comes along as bold and naked as it is, I think, because it can no longer be concealed, what we are dealing with.

The strategy for people winning is the work of the Alliance for Democracy and every other public-spirited organization on the face of the earth. I bring you, I think, pretty good news in this department. We have, I think, 54 chapters of the Alliance now and we have about 1900 paid members, people who are willing to take on the power system of the country and are studying how to do it. We are looking for the tangible benefit device that will convert the Alliance for Democracy into the mass movement that we need, that worked for the original American 19th century populists in the form of the statewide coop that brought people in for economic self interest.

At the Atchison convention we more or less survived six to eight months of procedural nit-picking and rather wasteful and damaging problems. I think we survived it and we've come out strong. I'd say we have an Alliance for Democracy that's going to be a "going jessie" in the United States.

The week after that conference, 85 people, heads of organizations from around the world were called together on Lake Huron in Canada by the Council of Canadians and the International Forum of Globalization. And we were from every continent and were of every color, from grassroots organizations of every kind, and our focus was not just on MAI. It was called the First Symposium on Corporate Rule. Where did the energy for such a meeting come from? It came from NAFTA and the World Trade Organization and the impotence of the United Nations in international regulations and it comes from the MAI.

Furthermore, next March in Geneva there's going to be a much larger conference from every continent to organize against what is now generally called, in a slangy way, the "neoliberal movement." It is not really a neoliberal movement. It is the declaration of war by the transnational corporations on democracy itself. They're telling us "You cannot pass laws that cost us money, or we will pass treaties through your governments, which we control, which will cost you more money than that."

We can't tolerate it, we have a tremendous opportunity. It is an educational opportunity to show people that what we generally think are our political differences left to right are, in fact, being superseded, being saturated and softened into meaningless pulp by the emergence of a seeable, palpable, yet unmistakable international aristocracy. There's only one way to fight that aristocracy without violence and that is by connecting up first, by vivifying our own democracies and then connecting up the civil society organizations at the self-government level; not governments, not political parties, but people organized in their own interests all over the world.

I think we've made a good start and the MAI is simply going to be one of the things that gets flipped on the way to an international democracy.

Related site: Draft text of MAI, as of May 1997

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