[asia-apec 812] GATT Watchdog Media Release - MAI

[Gatt Watchdog]

GATT Watchdog
PO Box 1905
Christchurch
Aotearoa (NZ)

MEDIA RELEASE FOR IMMEDIATE USE

19 October 1998

Scorn Poured on Latest Government MAI Moves On Eve of OECD Meeting 

The government's newfound "wait-and-see" approach to the controversial
Multilateral Agreement on Investment should be taken with a large pinch of
salt, says GATT Watchdog.

"The current concern and caution seemingly emanating from the Ministry of
Foreign Affairs and Trade (MFAT) is in large part an attempt to play down the
depth and complexity of international opposition to the MAI from other OECD
governments, and a pathetic face-saving exercise for a government which cannot
afford any more political embarrassment," said Aziz Choudry, GATT Watchdog
spokesperson.

"It is desperate to put a domestic spin on the mess that the MAI is in, hoping
that people will forget the profoundly anti-democratic way in which it has
dealt with the agreement, the uncritical zeal with which it has promoted it,
and the puerile, patronising way in which it has treated critics of the
agreement," he said.

"The minority government wants people to embrace next year's APEC meetings
without asking any hard questions about who benefits from trade and investment
liberalisation.  There are strong similarities between many of the provisions
of the draft MAI and the APEC non-binding investment principles which member
economies agreed to implement at the 1994 Bogor APEC Leaders Meeting".

French Prime Minister Lionel Jospin last week told his parliament that the
current draft MAI threatened French sovereignty and could not serve as a basis
for the agreement.  While announcing that France would not take part in
tomorrow's MAI meeting, Jospin specifically referred to concerns about the
current economic crisis as "the hasty and sometimes unreasonable movements
that have gripped markets".  He described signing the MAI as conceding
"sovereignty to private interests under the pretext of a discussion of a code
on international investment".

"The global economic turmoil, and the massive international mobilisation
against the agreement around the world have fuelled the crisis of legitimacy
which is already engulfing initiatives like the MAI, the APEC process, and
the model of economic development which they promote.  The problems that the
MAI faces vindicates our view that such agreements and processes are like
Dracula - they cannot survive exposure to scrutiny in clear daylight".

"Ministries like Te Puni Kokiri and the Ministry for the Environment have
expressed real concerns about the impact of the draft MAI.  But it is hard to
tell how much these have genuinely influenced the government's newfound
position, and to what extent concerns about the Treaty and the environment are
merely being disingenuously trotted out now because Treasury and MFAT think
that the MAI is too "watered down" to be acceptable to their narrow economic
worldview.  At a time when it should seriously reevaluate its blind faith in
the free market the government remains desperate to cling to the myth that
there is nothing wrong with the market economic model," he said.

"Given the on-again-off-again nature of international trade and investment
negotiations, the serious difficulties now engulfing the MAI do not spell the
end of the road for such an agreement.  The MAI does not exist in a vacuum.
Some OECD countries have already stated that they would rather see
international negotiations on investment transferred to the World Trade
Organisation.  The powerful economic interests behind the MAI - countries and
companies - will continue to push for such an agreement at whichever forum
they feel they stand to get the best results".

GATT Watchdog is also highly sceptical at pledges made by Don McKinnon to
consult with political parties on the MAI after this week's Paris OECD
meeting and to fully inform the public of the government's position on the
MAI.  

"The government has utterly ignored its commitment to a six-month "period of
assessment and further consultation between the negotiating parties and with
interested parts of their societies...a transparent negotiating process and...
active public discussion on the issues at stake in the negotiations" (OECD
Ministerial Meeting, April 28, 1998). For such consultation on the MAI to have
had any genuine meaning it should have taken place before
negotiations began in 1995", said Mr Choudry.

For further comment, ph: Aziz Choudry (03) 3662803