[asia-apec 594] NZ: "MAI-nority" Government Plans To Push On With Investment Treaty

[Gatt Watchdog]

GATT Watchdog
PO Box 1905
Otautahi (Christchurch)
Aotearoa (New Zealand)

Media Release For Immediate Use

1/9/1998

"MAI-nority" Government Plans To Push On With Investment Treaty

The Cabinet reshuffle, recent discussions between NZ, Australian, and Canadian
Treasury officials,  and the impending mid-October lifting of a six-month
moratorium on discussions on the Multilateral Agreement on Investment (MAI)
have prompted a warning from GATT Watchdog that the MAI is about to rear its
ugly head again.

"We know that New Zealand Treasury officials have been in recent contact with
their Canadian and Australian counterparts about the MAI. US contacts tell us
that MAI negotiators from the US, European Union and Canada have been meeting
at a bilateral level to discuss issues relating to the agreement, including
exceptions.  US negotiators have described recent discussions on the MAI as
"clearing cobwebs" and working out how to move on to resolve the many
disagreements which have threatened to derail MAI negotiations," says GATT
Watchdog spokesperson Leigh Cookson.
 
"The reconstituted Shipley MAI-nority government should come clean about New
Zealand's current involvement in MAI-related discussions.  We now have an
undisguised ideologically extremist minority government which will go for
broke to push on with locking us into maintaining one of the world's most
open economies, regardless of the human or environmental costs," she said. 

The MAI has come in for massive opposition throughout the world from NGOs,
unions, peoples organisations, and a number of municipal and provincial
governments after it was revealed that OECD governments had been negotiating
this agreement in secret since 1995.  

"Local Government New Zealand, and several major local authorities including
the Christchurch and Dunedin City Councils have issued statements and
resolutions strongly critical of the MAI.  With local body elections coming up
next month, the government could well find the MAI on the agenda of many
candidates, and egg all over their faces for failing to heed the widespread
opposition to the agreement."

"A major concern about the MAI is the way in which foreign investors can sue
the government of a country when it feels that it has been disadvantaged in an
actual or planned investment.  The "expropriation" and "investor dispute
settlement"  provisions of the MAI are based on provisions in NAFTA (North
American Free Trade Agreement) which allow for such cases to be conducted in
secret.

"In July, US petrochemical company Ethyl Corp pocketed C $ 13 million from the
Canadian government for lost business over a briefly banned fuel additive,
MMT,  agreeing to drop a legal case against Ottawa which claimed that the
federal government had broken its NAFTA obligations in imposing the ban.  Now
another US corporation, S.D Myers, is suing Ottawa for prohibiting the
cross-border shipment of PCBs, demanding compensation for lost profits."

"Under the MAI, such antidemocratic standover tactics by powerful companies
fixated on making a fast buck and little else, will snowball and spread
throughout the 29 OECD countries.    Big business will effectively use the MAI
to bully governments into only passing laws which favour them.   That is
outrageous.  Worse still - the secrecy that surrounds this process of settling
disputes would prevent ordinary citizens from knowing which laws are being
challenged and why," she said.

GATT Watchdog has sent an Official Information Act request to Treasurer and
Minister of Finance Bill Birch in relation to recent and current New Zealand
involvement in MAI discussions.

"The resumption of MAI negotiations in October is expected to lead to a
further meeting in April 1999 with the aim of concluding the MAI before the
World Trade Organisation (WTO) launches its next trade liberalisation round."

"The New Zealand Government and others who want to push ahead further and
faster with free trade and investment, show few signs of rethinking their
economic direction in the wake of the international economic crises which
many critics of unregulated markets have long predicted," she said.

At the April 28th OECD Ministerial Meeting Ministers decided on a six-month
"period of assessment and further consultation between the negotiating parties
and with interested parts of their societies".  The Ministerial Statement
also stated that "[m]inisters are committed to a transparent negotiating
process and to active public discussion on the issues at stake in the
negotiations".  

"Needless to say, the Shipley government has failed to honour such
commitments," she said.
 
The MAI was nicknamed the 'stealth treaty' by its critics to denote the
secretive anti-democratic way in which it has been negotiated.  The move to
pause negotiations for six months from April was a further attempt to get the
MAI out of the limelight and away from the public scrutiny and opposition that
had mounted against it, said Ms Cookson.

"The National MAI-nority government would prefer to be allowed to continue to
participate in MAI negotiations in secrecy, rather than risk the same level
of political embarrassment and outrage that they faced when ordinary people
and media journalists found out about the agreement last year", she said.

For further comment, please contact Leigh Cookson (GATT Watchdog)
ph (03) 3662803