The secret trade deal that corporations hope you never hear about
If corporations are persons under the law, what do they dream about? Turns out
it's just what we always thought: world domination. They're getting there via an
international treaty you probably never heard of called the Multilateral
Agreement on Investments. The MAI purports to "liberalize" the rules for
international investing. It's sort of like the North American Free Trade
Agreement (NAFTA), but global; like the General Agreement on Tariffs and Trade
(GATT), but more powerful; like the Constitution, but for corporations, not
people. You don't believe it? Listen to Renato Ruggiero, director general of the
enforcement arm of international trade, the World Trade Organization: "We are
writing the constitution of a single global economy." And he's not asking for
Since 1995, representatives of the world's richest nations and mightiest
corporations have been working on the agreement in a Paris hotel. The negotiators
are members of the Organization for Economic Cooperation and Development,
sometimes known as the "rich nations club." (Originally the agreement was to have
been negotiated by the larger World Trade Organization, but the United States
insisted on the exclusive OECD so as not to "water down" the agreement.) The rest
of us might still be in the dark about the MAI had someone not leaked a draft
copy of it a year ago January.
The ostensible purpose of the MAI is to protect the rights of international
investors. It would do so by giving foreign corporations equal standing with
domestic ones. For example, if your town is privatizing its water supply, a
bidder can't be excluded just because it's from Latvia or Malaysia.
In effect, the proposed MAI would give corporations equal standing with nations,
guaranteeing them the right to directly sue national governments. This might
happen with some regularity, because among the MAI's many corporate bonbons are
"takings" provisions even more extreme than those already rejected by the Senate:
even a "lost opportunity to profit from a planned investment" would be grounds
for mandatory compensation. For example, a foreign timber company owning land in
the Pacific Northwest could sue the United States for damages if efforts to save
the salmon prevented it from logging to the waterline. To resolve such disputes,
countries would give their unconditional consent to go before an
industry-friendly tribunal of the complainer's choicethe International Chamber
of Commerce, for instance. Guess who would have the edge before that body?
Such cases are already being brought under current, weaker agreements. Under the
"expropriation" language in NAFTA, the U.S.-based Ethyl Corporation is suing
Canada for $251 million for banning the company's gasoline additive MMT, a
suspected neurotoxin. Under the MAI, similar suits could become commonplace,
forcing governments to pay dearly for the privilege of protecting their citizens.
The MAI would also relieve industry of "performance requirements," regulations
like those mandating that manufacturers use certain percentages of recycled
material. Threatened too would be state laws like those in Oregon and Idaho
forbidding the export of raw logs. The United States would be allowed to shield
certain environmental protections from the MAI's blowtorchbut only if it agreed
not to pass any more such laws in the future, and to phase out the offending
The MAI would also spell an end to boycotts and trade sanctions against countries
or businesses violating environmental, labor, and human-rights standards.
Massachusetts' ban on buying from firms that do business in Burma, and Maryland's
proposed restrictions on trade with Nigeria (already under attack as a violation
of GATT) would be illegal. Had the MAI been in force in the early 1980s, there
would have been no international sanctions against South Africa under apartheid,
and Nelson Mandela might still be in jail.
Realizing somewhat belatedly that such provisions might be a hard sell to a
Senate that would have to approve the treaty by a two-thirds margin, U.S.
negotiators have made weak attempts to add environmental language. Business
isn't having it. "We will oppose any and all measures to create or even imply
binding obligations for governments or business related to environment or labor,"
declared Abraham Katz, president of the U.S. Council for International Business.
For the MAI, there will be no NAFTA-like "side agreements" with even paper
environmental protections: this time big business wants it all.
And they'll get it, too, unless you complain loud and long. Contact Dan Seligman
in the Sierra Club's Washington, D.C., office at (202) 675-2387 or
and ask for a "Don't Trade Away Our Environment" MAI action kit. Or explore the links
at www.sierraclub.org/trade. As Lori
Wallach of Public Citizen says, our advantage is that there's no way the MAI can pass the
"Dracula test"it can't stand the light of day.
Change vs. Chainsaws
Forest chief speaks softly, industry carries a big stick
From the vehemence of the backlash, you'd think Mike Dombeck was some kind of
radical. Then again, maybe he is. He openly admits to wanting the U.S. Forest
Service to be a responsible steward of America's national forests.
Dombeck, a low-key fisheries biologist from Wisconsin, has been raising hackles
on Capitol Hill since he took over the Forest Service in January 1997, hinting at
big changes at Big Timber's pet federal agency. In fact, the new frontier that so
frightens timber hawks dates back more than a century. As the chief frequently
feels obliged to point out, he's only following the course set by Congress in the
1897 Organic Act, the law that created the national forest system in the first
"Much has been said of the Organic Act's emphasis on timber production," Dombeck
told agency staffers recently. "What is far less understood is the act's emphasis
on watershed maintenance and restoration. [These] are perhaps the oldest and
highest callings of the Forest Service and the agency is, and always will be,
bound to them by tradition, law, and science."
The idea of a Forest Service that cares for forests-even one that promises, as
Dombeck has, to maintain "a stable wood supply and jobs" via continued logging-is
heresy to the lumber lobby. For decades, the industry has feasted on profits from
below-cost sales on national forests-federal giveaways that have drained the U.S.
Treasury of hundreds of millions of dollars annually. Moreover, the harvest-happy
Forest Service has spent lavishly on roadbuilding on remote public lands, a
unique brand of corporate welfare in which taxpayers underwrite the plunder of
their own resources.
Dombeck's first year at the helm brought only such incremental change as the
ousting of some pro-timber lieutenants. But when Dombeck launched his second year
by proposing a limited, 18-month "time out" on roadbuilding, the empire struck
back. Though the moratorium fails to cover Alaska's Tongass National Forest and
much of the Pacific Northwest, it would defer some timber sales and keep
chainsaws out of millions of acres the industry has been itching to cut.
proponents countered with bloated job-loss projections and legislation by
Representative Bob Smith (R-Ore.) that promoted clearcuts under the guise of
restoring forest health. Even the GOP-controlled House, however, said "no sale"
to Smith. Now hostile congressional leaders, who made a habit of calling Dombeck
on the carpet earlier in the year, are threatening to pull the rug out from under
his entire agency.
In a February letter, four key timber-state Republicans warned of busting the
Forest Service to a "custodial role" if its chief persisted in trying to manage
the nation's forests for purposes other than logging. "The time has come," mused
the authors darkly, "to consider ways to reduce the investment of billions of
dollars each year in light of the increasingly diminished returns on that
The letter-writers-Alaska's Senator Frank Murkowski and Representative Don Young,
and Idaho's Senator Larry Craig and Representative Helen Chenoweth-all chair
congressional panels that control forest legislation. And they seem to regard the
Forest Service chief as a perfect foil for their long-held outrage at ecosystem
preservation, especially as it affects timber-industry profits in their home
Besides making noises about forcing the Forest Service to limp along with
"significantly reduced budgets" and "far fewer employees," they've invoked the
prospect of an outside board to take charge of its finances. Young, who heads the
House Resources Committee, and Chenoweth, chair of the forests subcommittee, have
also raised legal questions about an agency memo that recommended using Al Gore's
clean-water initiative to promote forest reforms.
"The simple answer is that time is up," says Chenoweth, who accuses Dombeck of
politicizing "this once-proud agency." Adds Craig, more bluntly: "The gloves are
"Dombeck's talking about the value of forests versus the value of timber, and
that terrifies them," says Melanie Griffin, director of the Sierra Club's lands
program in Washington, D.C. "He's the wasp at the timber industry's picnic." But
she also sounds a cautionary note: despite overwhelmingly favorable comments from
the public, the road ban is not yet in place. And where backbone is an issue, the
record of the Clinton administration is spotty at best.
Despite his rising profile, Dombeck remains low-key. He wants to lead, he has
said, "by using the best available scientific information based on principles of
ecosystem management that the Forest Service pioneered. And we can use the laws
that guide our management to advance a new agenda-an agenda with a most basic and
essential focus: caring for the land and serving people."
For those more interested in serving the agenda of the lumber barons, them's
fightin' words. B.J. Bergman
The Little Engine That Couldn't
Sorry, say the Big Three automakers, but we just
won't be able to meet federal clean-air standards; we're selling too many sport utility vehicles. Sound
familiar? That's because you've heard the song before: when it comes to technical
innovation, Detroit's "can't do" spirit shines through every time.
1959 "We felt that [installing seat belts] was an unnecessary imposition and
unnecessary cost...because the belt would do the customer no good unless
Paul Ackerman, vice president of Chrysler. Seat belts became mandatory in 1964.
1966 "Many of the temporary standards are unreasonable, arbitrary, and
technically unfeasible...If we can't meet them when they are published
we'll have to close down."
Henry Ford II on federal safety requirements for laminated windshields,
collapsible steering assemblies, enhanced door locks, and lap and shoulder safety
belts. Ford survived.
1971 "But the shoulder harnesses, the headrests are complete wastes of money . .
. and you can see that safety has really killed all of our business. We are in a
downhill slide, the likes of which we have never seen in our business. And the
Japs are in the wings ready to eat us up alive."
Lee Iacocca, then-president of the Ford Motor Company, in (taped) conversation
with President Richard Nixon. Ford survived again.
1972 "It is conceivable that complete stoppage of the entire production could
Earnest Starkman, vice president of General Motors, on the introduction of
catalytic converters. Production continued.
1974 Fuel-efficiency standards "would restrict the industry to producing
subcompact-size cars, or even smaller ones, within five years."
Alan Loofburrow, vice president of engineering, Chrysler. His company continued
to produce standard-size cars.
1997 "If [the proposed global warming treaty is] adopted, the U.S. can expect
soaring production costs and significantly higher driving costs."
Andrew Card, president and CEO, American Automobile Manufacturers Association.
Some things never change.
(For more examples, see the Environmental Working Group's Web site at
www.chickenlittle.org.) Paul Rauber
Garbage Out, Garbage In
Because of Michigan's relaxed standards for siting landfills, the state has
become a garbage magnet. In a deal last year worth as much as $100 million, trash
giant Browning-Ferris Industries signed a five-year contract to dump all of
Toronto's municipal garbage in a landfill just outside Ann Arbor. Sierra Club
members there were especially outraged to learn why their city has so much
landfill space to sell off: Ann Arbor is a model recycling city, with an amazing
1997 recycling rate of 52 percent. The more Michigan saves, the more others can