Economic professor Chris Ragan and Council of Canadians chair Maude Barlow PHOTOS: OWEN EGAN

A good deal or a dangerous threat:
Sparks fly at MAI debate

SYLVAIN-JACQUES DESJARDINS | A spirited debate on the Multilateral Agreement on Investment was held between McGill economics professor Chris Ragan and political activist Maude Barlow Monday night. About 110 people gathered in the cavernous Centennial Ballroom of Macdonald Campus for what was a heated He Said/She Said dispute. Ragan, who specializes in macroeconomics, had the unenviable task of defending the Multilateral Agreement on Investment (MAI), a contentious hot potato of a deal which could be on its death bed. Ragan said there were two explanations for his defence of the MAI, which he admitted contains several flaws. "Either I'm insane," he said, chuckling, "or there's a different take on this agreement." Simply put, the MAI is supposed to be like a "charter of rights" for corporations that would replace a whopping 1,600 investment treaties between members of the Organisation for Economic Co-operation and Development (OECD), which represents 29 industrialized countries, from Canada to Turkey. Negotiations for the MAI started in May 1995 at the request of international corporations, which argued that a set of rules -- similar to those of the North American Free Trade Agreement -- are needed to govern global investment. These would protect investors against discrimination and expropriation of their interests. It would also facilitate investment in foreign countries. The MAI is said to be near its demise because OECD members are battling over its core principles, while its critics argue it would threaten worker protection and environmental regulations because corporations would likely invest in, or move to, countries with the most lenient laws. Canada and France, for example, are demanding a long list of exemptions for their cultural industries, something the U.S. is fiercely opposed to. As it stands, the MAI would prohibit Canada from subsidizing its radio, televi-sion or movie industry if it did not offer the same grants to private, and even foreign, corporations. And these companies could not be forced to uphold Canadian content rules. "This would jeopardize everything we are and everything we stand for in this country," Barlow said. Ragan, however, said it is unrealistic for Canada and France to demand cultural exemptions from the MAI. "The more exemptions there are in this deal, the more problems it will create," he said, adding that all 29 OECD countries want exemptions, "but no country wants to accept those from others." An MAI is needed, he added, since global investment has grown from $25 million to $350 billion in the last 23 years. And Canada would have to take part because "it is a small economy in a big world." Barlow, voluntary chair of the Council of Canadians, a 100,000-member human rights, environmentalist and democracy advocacy group, is fiercely opposed to the MAI. "There is a need for an MAI of some sort," she conceded. "But this is not the one. It is deeply flawed and profoundly compromises the sovereignty of all nation-states, including Canada." The MAI, she said, will impede Canada and other OECD countries from setting conditions on foreign investment, will give trans-national corporations unlimited access to a state's natural resources, put public health care networks at risk, allow international corporations to sue federal governments, and prevent countries from implementing their own environmental policies. She added that the MAI could override local and provincial laws, would not exempt social programs from being considered as subsidies and would lock all 29 countries into a 20-year deal. The 20-year lock-in, Ragan said, is a necessary evil of the MAI. "When companies invest in (factories) they do so with long term goals and need protection for their investments," he said. The MAI will ensure that governments treat foreign firms no better, but more importantly, no worse than domestic ones. That, he said, "will benefit the capital flow from rich countries to disadvantaged ones." As for the threat to health care programs, Ragan said governments will never lose the right to "levy taxes to pay for social programs." If Canada signs on to the MAI, Ragan allowed it will sacrifice sovereignty, but no more than when it signed pacts to ban land mines, reduce greenhouse gas emissions or when it pays annual dues to the United Nations. Canada, he said, would profit from the MAI through increased foreign investment here and a greater return on capital for Canadian shareholders of international corporations. That, in turn, would stimulate job growth and create a "subtle and steady increase in Canada's standard of living." Barlow countered that the MAI encourages companies to invest in third world countries, where they will not increase the standard of living or protect human rights. It would be unethical and bad foreign policy, she added, for Canada to allow companies to make profits on the backs of the poor, all in the name of increasing shareholder dividends. What the agreement does, Barlow stressed, is grant giant global corporations the right to do almost as they please. "It will allow the free market to regulate what was once the government's responsibility," she said. Comparing the MAI to NAFTA, Barlow said the latter illustrates how the Canadian standard of living can be hurt by such far-reaching deals. Since NAFTA's implementation in 1989, she estimated, "we have seen a 58% increase in child poverty -- the highest of the industrialized world -- a tripling of millionaires, and we've seen social spending move backwards to 1949 levels." Barlow said it should be up to each country to decide if and how a company can set up shop in its own backyard. "It's time for governments to stop governing for their corporate friends," she said to thunderous applause, "and start governing for their people."