The government of Canada aggressively - and quietly - advocated the Multilateral Agreement on Investments (MAI) through the OECD, even though this ran counter to the opinions of most Canadians. The agreement was finally abandoned in 1998, but most of the items being negotiated through MAI are now on the table through the World Trade Organization (WTO) and the Free Trade Agreement for the Americas (FTAA). Canada's position towards further "liberalization" is clearly affirmative.
The devastating failure of the WTO is that it regards expanded trade and investment as an end in itself. As such, the main agents of international trade and investment, transnational corporations, become the prime agents of the WTO negotiations, and direct the values and goals of the WTO. Essentially, the WTO, as an international legal body, is intricately connected to large corporations and their representative organizations, including the US Business Round Table and Canada's Business Council on National Issues (BCNI). These organizations seek to create an easy regulatory environment with as few restrictions and requirements as possible, while including strong protections for their interests. This, of course, is commonly called "unregulated capitalism". Such organizations are also privately run and financed and have no interest in protecting citizens' rights or the public weal.
Canada's Constitution, in keeping with the UN Universal Declaration of Human Rights, confirms the person as the legitimate basis for our country and clearly lays out our rights as citizens - the right to life, freedom of movement, expression, association, and secession, and establishes that the citizen is the source of legitimacy in the government of our country. Our constitution is supposed to protect and preserve the dignity and primacy of the citizen, and to allow the mechanisms of democracy to determine public policy in Canada.
A government that was committed to the primacy of the citizen would insist that an international agreement would start with this premise and that negotiations on how to conduct international trade and investment would proceed from a desire to embody this premise. Such an agreement would entrench the UN Universal Declaration on Human Rights, and would conduct all negotiations in such a way that they met the criteria of the Declaration. Corporations that wanted freedom to move in an unrestricted manner would have to demonstrate that their actions were the "least damaging to human rights" and the burden of proof would be on corporations to prove that their actions fulfilled these criteria.
Unfortunately, the fact of the WTO agreement is a complete reversal of this. Instead of corporations acting in such a way that they preserve the dignity of citizens, governments need to preserve the freedom of corporations, laws must be the "least trade restrictive," and the burden of proof is on the government to demonstrate that the laws are "necessary." Worse, the government of Canada has been an active participant in the negotiations and is fully committed to this perverse, corporate vision of internationalism. As a result, Canada's membership in international trade agreements like the North American Free Trade Agreement (NAFTA) and WTO restrict the ability of our government to enact public policies that would protect and enhance our rights.
Some details of the WTO agreement:
Countries cannot discriminate between products based on the method of production, regardless of how harmful one method may be relative to another.
Restrictions must be "necessary" - not just beneficial or preventative. This destroys the right of citizens to collectively control their own environment.
Products can only be restricted based on danger to public health if the country can prove worldwide scientific consensus - an unreasonable burden of proof.
Restrictions must be the "least trade restrictive" - and of course, the burden of proof is on the government making the restriction.
Trade-based Intellectual Property Measures (TRIPS) set global rules on patents, copyrights, and trademarks. Patents used to cover a specific process for making a product, so that someone else was free to develop a different process. Now, patents cover the products themselves, preventing other companies from developing cheaper alternatives. Ironically, in an agreement that is supposed to eliminate protectionism, this is an extreme form of protectionism - but it applies to corporations and not governments.
Trade-based Investment Measures (TRIMS) prevent governments from regulating foreign investment.
General Agreement on Trade in Services (GATS) covers banking, insurance, communications and financial services, and many countries - including Canada - are pushing to have health care, education and environmental services included. This would devastate Canada's ability to maintain good public health and education systems, and would prevent Canada from controlling its own resources, including fresh water.
All of these rules, in addition to specifically prohibiting government action and laying out clear consequences for offenders, introduce a "chill factor" - that is, countries avoid passing laws that might put them in violation of WTO rules. The sovereignty of nations is thus grossly compromised. If there is any concern that these claims are exaggerated, kindly regard some examples of NAFTA and the WTO in action:
- Beef: The European Union had a ban on beef which had been treated with growth hormones, on the grounds that significant evidence existed which questioned the safety of beef hormones for human consumption. The United States, backed by Canada, challenged the EU through the WTO on the grounds that the ban amounted to discrimination against imports. The US won the complaint, because the EU did not possess scientific "certainty" regarding the dangers of hormones. When the EU fell back to the position that it wanted hormone-injected beef to be labeled, the US denounced the move as discriminatory. This overturns the basic market principle that consumers should be allowed to make informed decisions on what to buy.
Milk: Monsanto challenged the Canadian government for rejecting bovine growth hormone, a hormone that boosts milk production in cows by 15%, on the grounds that the ban discriminates against imports on the basis of its production method. Again, the onus would be on Canada to provide scientific certainty that the hormone is harmful.
Tuna: The US banned the importation and domestic sale of tuna that had been caught in nets that needlessly captured and killed millions of dolphins through the Marine Mammal Protection Act. Mexico complained to the GATT and later to the WTO, and won a ruling that the US is not allowed to discriminate between different methods to produce the tuna, thus overturning the law.
Computer Equipment: The US is considering filing a complaint against the EU for requiring that manufacturers of computers and other electronic equipment phase out the use of toxic chemicals (mercury, cadmium, lead) and also take ownership of used components for recycling.
Genetically Modified Organisms: Since the WTO prevents countries from discriminating between products on the basis of how they were produced, governments are unable to ban, restrict or label GMOs as such, thus preventing consumers from exercising the "consumer sovereignty" that is supposed to replace political action.
PCBs: US company Waste Management Inc. sued the government of Canada over regulations that limited the export of deadly PCBs on the grounds that they constituted a "barrier to trade." Think about this; the Canadian government was sued by an American company because of a Canadian law - which, incidentally, was made in accordance with the Basel Convention on Toxic Trade - which prohibited the export of PCBs into America!
MMT: US firm Ethyl Corporation challenged the government of Canada for banning the domestic use of gasoline additive MMT. The additive is toxic at high levels, but because there was not much evidence of its toxicity at low levels, the government had to reverse its ban.
Patents: Even though Prime Minister Brian Mulroney's Conservative government changed Canada's patent laws to extend patent protection for foreign patents to 20 years - which has demonstrably increased health care costs in Canada for no tangible benefit - patents filed before the bill was passed in 1989 only have 17 year patents. The US challenged this law through the WTO, claiming that it violates WTO rules.
Technology Partnership: This Canadian government financing organization came under fire through the WTO because it offered concessional financing to buyers of Canadian exports. This qualified as a subsidy under WTO rules.
Auto Pact: If there was ever a model for a good, mutually beneficial trade agreement, it was the Canada-US Auto Pact, which guaranteed a market for US automakers and guaranteed that for every car sold in Canada, a car would be built in Canada. FTA and NAFTA grandfathered the Auto Pact, but it did not survive a WTO challenge from Japan, which claimed that the pact discriminated against other automakers.
Defense Spending: Amazingly, the US is able to maintain subsidies for American technology companies to the tune of many billions of dollars a year on the argument that these qualify as "defense spending." Tough new US laws restricting cross-border trade in defense and aerospace products hurt Canadian firms, even though this no less a form of "discrimination" than any other examples listed above. However, WTO rules exempt defense spending - which is incredible since public health and the environment are both fully subject to the rules. Indeed, it seems that military spending is the only area in which governments are able to spend money and regulate business in an unfettered manner. Obviously, the WTO has a clear set of values that are at odds with what the citizens of Canada - and, I suspect, most other WTO nations - value and want.
Ironically, the majority of what we call "international trade" actually consists of trade in armaments among governments - hardly commercial trade in any meaningful sense. Of the remainder, most trade is intrafirm - that is, between different divisions of the same company. Clearly, the biggest beneficiaries of trade and investment liberalization are the transnational corporations who are able to take advantage of corporate sovereignty in international affairs. This has had clear and demonstrable consequences for Canada's sovereignty. Most of the FDI in Canada has been US corporations buying Canadian corporations - Metronet, Macmillen Bloedel, 20% of Bell Canada, Newcourt Credit Group, Nova Chemicals, Peoples Jewellers, Shoppers Drug Mart, Tim Hortons, Bauer, Labatt Breweries, Birks, and so on. In 1997, foreign owned companies made over 31% of corporate revenues in Canada. Total foreign investment in Canada was $240 billion, up from $122 billion in 1989. Interestingly, a free market zealot like The Globe & Mail's Jeffrey Simpson can be moved to write: "Nobody likes to say this any more - economic nationalism being apparently passe - but foreign control of Canadian manufacturing might be among the reasons foreign firms are more likely to do major research at home than abroad." (Globe & Mail, Nov 17, 1998, p. A25) Evidence of this comes from Canada's drop to seventh in US patent issues, behind countries like Taiwan and South Korea. Therefore, even the trade equals growth argument, which seems to be the only redeeming quality of these trade agreements, is highly dubious at best.