Thursday, May 12, 2022

Multinational’s charter (1998)

From the April 1998 issue of the Socialist Standard

For the last few years the 29 members of the Organisation of Economic Co-operation and Development (OECD) including Britain, have been secretly negotiating a Multilateral Agreement on Investment (MAI) which they hope to conlude by the end of April.

This treaty is ostensibly meant to provide a framework for international co-operation in protecting investments made by multinational and international corporations and institutions. The OECD will adopt the procedures of this treaty among its membership, which includes the most economically advanced states in the world. The plan is to extend it to all states, through pressure and the development of the idea of MAI being a hallmark of investment security. Once any state joins it will be bound to the treaty’s strictures for a minimum of twenty years (that being the time it takes to actually withdraw from the treaty).

The treaty seeks to protect international investment in two ways.

Firstly, it will forbid any member state from distinguishing between local capital and foreign capital (for instance this could forbid states from putting restrictions on media ownership by non-nationals, as is found currently in several states). This would extend towards the prevention of compulsory nationalisations and expropriations without compensation (as an example, Chancellor Brown’s windfall levy could have counted as an expropriation, which the British government would have had to compensate foreign investors for, had the treaty been in force then).

Secondly, it will for the first time give multinationals and investors rights under international law. The treaty will provide a set of provisions for punishments for infringing its strictures. Effectively this means that if a corporation does not like a law passed by a country, it can take that country to court to try to get the law changed. Of course, as usual when our corporate masters grant themselves rights, there are no corresponding duties–there is no commitment upon them to protect the welfare of their workers or the local environment.

The Green movement is mobilising to attack this treaty, on the grounds that it will damage the environment, and impede national sovereignty and restrict democracy by providing for unelected, unaccountable business elites to be able to change the laws of democratically elected governments, and by restricting the capacity of individual governments to stimulate their own economy or build a local economic base of their own. What, though, is really so new in this?

As far as socialists are concerned, states have always been in the pocket of unaccountable business cliques, and have always worked in their interest. Many of the states whose “sovereignty” will be infringed are already corrupt and toadying lackeys to our corporate masters, with despotic elites living the life of Riley out of ill-gotten plunder from environmental despoliation and pillage, wealth almost literally torn from the bodies of the world’s poor. A little more formalisation of this relationship, and a little extra protection for our masters can’t be such a bad thing, really? Can it?

This treaty is important because it means that for the first time our corporate elites are taking direct control of matters, instead of working through their state. One of the greatest threats to their own dominance of the world has been nationalist competitors, restricting their access to markets by asserting a claim to rights in a particular territory. Just look at how many wars have been fought these past fifty years by our imperial masters against nationalist upstarts: Suez, Vietnam, America’s dirty wars in South America; all in the name of keeping some particular territory within the web of international corporate capitalism. Having crushed most such opposition, all that remains for them now is to assert their authority within such territories and to lay claim to plunder of the world.

As the economic situation deteriorates, with the older capitalist states almost unable to sustain growth and the South Asian tigers suffering crises, our masters must desperately search around for new markets and sources of profit and new investment outlets. And they must seek to protect that investment, and make sure that every drop of wealth that they suck out of these areas will return to them, and not to some group of local rivals.

This treaty will strengthen the negotiating hand of multinationals against local power elites, enabling them to get even better returns on their profit than they could if they had to bribe the local rulers. It also makes it easier for them to try to force local governments to act against the workers, and write into law whatever is to the benefit of our international overlords.

As their position has become more precarious they have had to cut out any room for manoeuvre by states, and that includes the pressure release of even a moderately reform-minded government. By cutting off the route of reform in the way that this treaty does, our rulers are accentuating and revealing the truth about the class divide.

The MAI means making the strong even stronger and even more effective and efficient in the exploitation of the working class and the environment the world over. In their desperation our corporate masters are opening their greedy maw even wider, determined to swallow the world whole.
Pik Smeet

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