NGOs, Business, and International Investment: The Multilateral Agreement on Investment, Seattle, and Beyond

Abstract

Until the 1990s, the General Agreement on Tariffs and Trade (GATT), predecessor of the World Trade Organization (WTO), facilitated international trade negotiations with relatively little attention from the international media. Of course, there were controversial aspects of previous rounds, such as agriculture in the Kennedy Round in the 1960s and subsidies in the Tokyo Round in the 1970s, but these were either confined to particular sectors or were relatively arcane matters from the point of view of the general public. [1] Officials at GATT, an obscure and small institution based in Geneva compared to the International Monetary Fund (IMF) and World Bank, could assume that their relatively uncontroversial status in the developed countries would persist. [2] The main domestic opponents of trade liberalization rounds in the 1950s and 1960s were uncompetitive sectors. Where firms and unions in such sectors were politically organized, they were typically bought off with sectoral exceptions or new forms of protecti on. Today, things could hardly be more different. At the Seattle ministerial meeting of the WTO in November 1999, government negotiators were besieged by media coverage and protestors representing thousands of nongovernmental organizations (NGOs) opposed to the envisaged Millennium Round negotiations. Suddenly, international commercial policy negotiations [3] had become high drama, and the WTO was at least as controversial as the IMF. This new situation is most immediately threatening to proliberalization business lobbies, which, over a series of postwar GATT rounds, came to form a close and collusive relationship with government policymakers of the major developed countries. In short, these business groups fear that the politicization of international commercial negotiations, and the associated demands by many NGOs for inclusion in them, threaten the very basis of the postwar structure of gradual international economic liberalization. NGO critics, [4] however, argue that the WTO and similar organizations (and indeed the governments of major developed countries themselves) have been captured by big business and that they must be either radically democratized or stopped altogether. Thus, we may have arrived at a fundamental crossroads in global economic governance. This article addresses two main questions that follow from the above. First, do NGOs now have the power to derail traditional approaches to and existing practices in international economic governance? And can they go further to influence the shape of the international commercial policy agenda? Second, is the trade-off between the workability of international commercial policy negotiations and their greater democratization as severe as big business and many governments claim? What prospects are there for integrating NGOs into the policymaking process, and how should this be done? The focus of the discussion that follows is on the negotiations for a Multilateral Agreement on Investment (MAI) in the mid-1990s. It is argued that the MAI was a watershed for the following reasons. First, it is difficult to understand NGO opposition to the Millennium Round agenda in Seattle in 1999 without addressing their opposition to and mobilization against the MAI. The strong and not wholly mistaken perception of many NGOs that international business lobbies would simply transfer the investment rules agenda from the Organization for Economic Cooperation and Development (OECD) to the WTO was an important factor in mobilizing opposition in Seattle. [5] A second reason is that the MAI negotiations were conducted under the auspices of the OECD in Paris, in part because of the expectation that this would be a low-profile and uncontroversial venue for such talks. This expectation proved disastrously mistaken. Prior to the MAI, the OECD enjoyed perhaps an even lower public profile than GATT, but the OECD sud denly became the object of much hostile NGO and media attention. …