|/* Written 9:41 AM May 2, 1998 by email@example.com in igc:labr.all */
/* ---------- "Internet vs. MAI" ---------- */
> Financial Times THURSDAY APRIL 30 1998
> Network guerrillas
> How the growing power of lobby groups and their use the Internet is
> changing the nature of international economic negotiations. By Guy de
> There is a memorable scene in the film Butch Cassidy and the Sundance
> Kid when the outlaw heroes are hounded for days by a bunch of armed
> men on horseback. After failing to shake off their mysterious
> pursuers, one of the hunted men asks despairingly: "Who are these
> Similar fear and bewilderment have seized governments of
> industrialised countries as they struggle to draft rules for the
> treatment of foreign investment. To their consternation, their efforts
> have been ambushed by a horde of vigilantes whose motives and methods
> are only dimly understood in most national capitals.
> This week the horde claimed its first success and some think it could
> fundamentally alter the way international economic agreements are
> The target of their attacks was the Multilateral Agreement on
> Investment (MAI) being negotiated at the Organisation for Economic
> Co-operation and Development, the attackers a loose coalition of
> non-government organisations (NGOs) from across the political
> spectrum. They included trade unions, environmental and human rights
> lobbyists and pressure groups opposed to globalisation.
> The opponents' decisive weapon is the internet. Operating from around
> the world via web sites, they have condemned the proposed agreement as
> a secret conspiracy to ensure global domination by multinational
> companies, and mobilised an international movement of grass-roots
> This week, they drew blood. Unnerved by the campaign against the MAI,
> OECD ministers interrupted the negotiations for six months in a
> belated effort to rally support for the proposed agreement among
> politicians and voters at home.
> Does it matter? Postponing the agreement may make little difference
> for the maligned MAI is a paper tiger. Trumpeted as a historic
> initiative in 1995, flawed preparatory work and bitter disagreements
> among negotiators have thwarted its main aims anyway, such as relaxing
> national investment restrictions.
> Nonetheless, the unexpected success of the MAI's detractors in winning
> the public relations battle and placing governments on the defensive
> has set alarm bells ringing. "This episode is a turning point," says a
> veteran trade diplomat. "It means we have to rethink our approach to
> international economic and trade negotiations."
> The central lesson is that the growing demands for greater openness
> and accountability that many governments face at home are spilling
> over into the international arena. That makes it harder for
> negotiators to do deals behind closed doors and submit them for
> rubber-stamping by parliaments. Instead, they face pressure to gain
> wider popular legitimacy for their actions by explaining and defending
> them in public.
> There are signs these trends could affect many international economic
> agreements, including those involving the World Bank and International
> Monetary Fund. But nowhere are the lessons of the MAI affair likely to
> be studied more intently than at the World Trade Organisation. Born
> out of the General Agreement on Tariffs and Trade (a highly technical
> body), the WTO is emerging as the pre-eminent forum for global
> economic rule-making.
> Its task is complicated by three closely-related trends:
> * The threat of "globalisation backlash", as voters in the US and
> many other countries blame social and economic insecurity on free
> trade and open markets.
> * The extension of trade liberalisation beyond border barriers, such
> as tariffs and quotas, into areas that were until recently
> regarded as national policy preserves.
> As a result, trade liberalisation impinges far more directly than ever
> on ordinary people's lives, and risks stirring up popular resentment
> when it conflicts with sensitivities over issues such as environmental
> and food safety standards.
> * The growing reach of the WTO's disputes settlement procedures.
> Critics allege that the body's increased power to enforce world
> trade law puts countries' sovereignty at the mercy of a judicial
> process that lies beyond national control. Defenders of the WTO
> reject such criticisms as inaccurate and ill-informed. But some
> admit the organisation and its members are paying the price for
> acting with unnecessary secrecy.
> The system is already fraying at the edges, partly under pressure from
> its own members. Governments involved in controversial trade dispute
> cases regularly "leak" confidential interim rulings by WTO panels. WTO
> chief Renato Ruggiero says that unless disclosure rules are reformed,
> the organisation's credibility will be undermined.
> A US-led debate is under way on opening the doors wider. The WTO has
> equipped its new council chamber with a public gallery and invited
> representatives of more than 150 NGOs to its ministerial meeting next
> month. Some diplomats favour making disputes panel hearings public.
> However, it is uncertain whether such moves will be enough to satisfy
> the critics. Most officials admit they are in a dilemma over how to
> deal with the NGOs' demands, and how to assess their political
> One problem is deciding which organisations to listen to, and whom
> they represent. Governments agree that many such groups hold views
> that reflect a broad swathe of public opinion. But they also believe
> much pressure is exercised by fringe movements that espouse extreme
> positions, with little public support. The trouble is, as officials
> concede, that good organisation and strong finances enable such groups
> to wield much influence with the media and members of national
> The desire to neutralise the impact of such lobbying may push
> governments to work more energetically to drum up business support for
> liberalisation agreements. The OECD's failure to do so in the case of
> the MAI is an important reason for its problems.
> Business lobbies which trade negotiators have traditionally suspected
> of being mainly interested in preserving protection are becoming more
> active as proponents of free trade. Strong support from industry
> leaders on both sides of the Atlantic played a big role in WTO
> agreements last year to eliminate information technology tariffs and
> open global financial services markets to more competition.
> Nonetheless, striking the balance between wider public consultation
> and capitulation to lobby groups will not be easy. Some diplomats fear
> that if they concede too much they will be unable to resist demands
> for direct participation by lobby groups in WTO decisions which would
> violate one of the body's central principles.
> "This is the place where governments collude in private against their
> domestic pressure groups," says a former WTO official. "Allowing NGOs
> in could open the doors to European farmers and all kinds of lobbyists
> opposed to free trade."
> He and other trade experts fear the result would be to paralyse the
> WTO's effectiveness as an engine for freeing trade and turn it into a
> happy hunting ground for special interests.
> However, free trade advocates are aware that the MAI affair is likely
> to mean they will have to fight harder to keep the WTO's mission
> intact. "The NGOs have tasted blood," says one. "They'll be back for
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