WTO: Business dreams of new MAI



@box text intr = Unable to keep their mouths shut, business leaders from across Europe and the United States may have unwittingly sabotaged their governments' chances of launching a new round of trade talks — by issuing a wish list for future negotiations on investment which includes some aspects of the controversial, and failed, Multilateral Agreement on Investment.

In a report released on October 29 urging Europe and the US to work together to launch an "ambitious" trade round, the shadowy Trans-Atlantic Business Dialogue (TABD), which many campaigners allege wrote the initial drafts of several WTO agreements, called on the WTO to negotiate comprehensive rules aimed at removing barriers to investment and establishing high standards of investment protection.

From an initial focus on providing "transparency", "predictability", "stability" and "national treatment" (whereby foreign investors are treated identically to domestic investors), the talks on investment should then move on to deal with removing existing barriers to investment, redress for the settlement of trade disputes and "protection from expropriation", the TABD report states.

"Protection from expropriation" means the right of corporations to sue governments for policies which interfere with their ability to go about their business.

The most infamous "protection from expropriation" clauses are contained in the North American Free Trade Agreement's Chapter 11.

On October 26, Mexico finally settled one such Chapter 11 case, a five-year long legal wrangle through various NAFTA tribunals with a US company, Metalclad.

The company had complained that a Mexican government decision to close down one of its toxic waste dumps, on the grounds that it was polluting a nearby river, was "expropriation" and therefore illegal under NAFTA rules. In August 2000, a NAFTA arbitration panel ruled for Metalclad; Mexico has now finally paid the company more than US$16 million in compensation.

Such "protection from expropriation" clauses caused much international anger when they were included in the Multilateral Agreement on Investment and were a major reason for its shelving by the OECD in 1998.

From Green Left Weekly, November 7, 2001.
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