Brief Presented to the MAI Inquiry: A Citizens’ Search for Alternatives

Friday, November 13 1998

On March 26, 1998, Bishop François Thibodeau, Chair of the Social Affairs Commission, sent a letter to the Honorable Sergio Marchi, Canada’s Minister of International Trade, to express “grave concern” with Canada’s support for negotiations to finalize a Multilateral Agreement on Investment. The Commission raised a number of issues at that time, and asked the Minister to clarify several questions concerning the content and process of the MAI negotiations. Several other Catholic organizations have expressed their concerns as well.(1)

I am here with you this morning, not as an expert in international economics or trade law, but to reflect on how, from the point of view of Catholic social teaching, Catholic bishops view the important issues involved in the MAI debate. The issues we will discuss today are too important to be left to the domain of “experts,” since they affect us all in so many varied and profound ways. We are all experts in the discussion of the kind of economic future we care to construct for the next millennium. In a very real sense, the question of international trade and investment treaties is a debate concerning values. Is it inevitable that the MAI will enhance the current idolatry of the free market values of competition and unlimited economic growth, ecological irresponsibility and the growing exclusion of the impoverished? Is it time instead to focus on those basic human, community and even spiritual values that our overdeveloped societies have unfortunately discouraged? Perhaps it needs to be explained why the bishops’ commission called for a pause and reconsideration of the implications of stateless corporate metapower, expressed in the push for the current MAI.

THE COMMON GOOD

Catholic social teaching suggests many principles for action that can help guide the formation of conscience and the development of appropriate social action. One of the most important principles is that of the “common good.” Perhaps this principle was best explained for our present context in a document of our episcopal commission(2) which stated that the basic purpose of economic systems and structures “must not be the mere multiplication of products…(nor) profit or domination”(3) but to serve the needs of people for a more fully human life. The resources and goods of the earth therefore are to be developed to serve the common good. This is the basic principle which should govern all economic and political systems. “All other rights, whatever they are, including property rights and free commerce must be subordinated to this principle…”(4)

Since 1931 the popes have been concerned with the power and size of multinational corporations. Similarly, the Canadian bishops have raised their voices both in public statements in our country and in international synods of bishops in Rome to question the growing economic dominance of the transnational corporations.(5) The MAI, referred to by some as a “charter of rights and freedoms for transnational corporations,” or ” a charter of rights for absentee landlords,”(6) grants yet further powers to the economic behemoths of our era. Citizens may not enjoy the opportunity to bring complaints against corporations, but, on the other hand, the MAI can force governments to compensate foreign companies for perceived losses,(7) and bars countries from restricting “hot money,” investments or profits flowing in and out of their economies.

Who will benefit from the signing of a MAI? The answer seems to be that huge multinational corporations headquartered in the North, which have no allegiance to any state and who have lobbied hard for unfettered markets, would be favored. From listening to the people we minister to, and according to the principle of the common good, this is not what human beings, or indeed the environment, most need. It has certainly not been proven, through independent audits of social, environmental and gender issues, that the MAI would be of benefit to disadvantaged groups in Canadian society. We support the call for such studies before the MAI negotiations continue, as a way of guaranteeing the common good.(8)

PUBLIC PARTICIPATION

Another issue of concern to us is the nature of the debate. Rather than allowing an open process that encourages public education and participation, the MAI negotiations are lacking in all transparency. The Parliamentary Subcommittee that was eventually established to study the issue agreed that Canadians wanted, and had been denied, more opportunity to discuss the accord. The negotiations were devised to be a secret process involving only the 29 member countries of the Organization for Economic Cooperation and Development (OECD). Catholic social teaching has called for more capacity for civil society and governments throughout the world to counter the economic power of massive corporations. These titans who are often in league with docile governments, already control the rapidity and might of financial flows and seek, through the MAI, a further enhancement of corporate power.

PREFERENTIAL OPTION FOR THE POOR

If Canadians feel that they had little opportunity to grapple with the implications of the MAI, just consider how the countries of the South are faring! The OECD is often referred to as “a rich man’s club,” where only two developing countries (Mexico and South Korea) are members. We are opposed to any accord that would be negotiated without the consent and participation of the countries that it would affect. It is simply unacceptable that some leaders still believe that they can and even should negotiate a deal and then offer it to (and indeed impose it on) developing nations. If some countries are less-powerful to begin with, then there is, in all justice, no reason why asymmetrical agreements should not be signed, giving smaller and weaker economies a better chance to develop as they see fit.

The current economic crisis that began in Asia and has spread to affect all the economies of the world indicates that further market liberalization, whether through the MAI or other means, is not a solution to the development needs of the South. The North-South Institute’s analysis of the Asian meltdown labels the MAI as “certainly premature, if not misguided.” (9) The current campaign of the churches throughout the world to cancel the debt of the poorest countries would assist the poor much more than agreeing to the MAI.

THE RIGHTS OF WORKERS

Pope Leo XIII’s 1891 encyclical letter Rerum Novarum was translated into English as “On the Condition of the Working Class.” This document not only launched and guided the Catholic social apostolate for its first seventy years, but remains a major theme today.(10) When Pope John Paul II visited Canada in 1984, for example, he repeated a famous statement of the Canadian bishops that remains relevant today: “The needs of the poor have priority over the wants of the rich; the rights of workers are more important than the maximization of profits; the participation of marginalized groups has precedence over the system that excludes them.”(11)

If we agree that “the ethical principle that labour, not capital, must be given priority in the development of an economy based on justice,”(12) we would guarantee that the value of human labour would be protected and enhanced in the development of a investment treaty like the MAI. Specifically, this would mean that core labour standards would be respected and universally applied. Nothing in the MAI should negate the fundamental international human rights covenants and International Labour Organization conventions.(13) Yet the MAI includes no such protections.

SUBSIDIARITY

The principle of subsidiarity is relevant to the MAI question and also at the heart of Catholic social teaching. It essentially holds that decisions should be made at the level closest to those persons who would be affected by that decision.

The Social Affairs Commission pointed out in March, “When individuals are being told that they must take greater responsibility for themselves and at the same time fiscal responsibilities are being decentralized to lower levels of government, is it not paradoxical that Canada is poised to sign an agreement that gives more freedom to big business and undermines political power?”(14)

Governments at all levels are to be weakened in the face of an agreement that would even allow companies, for the first time, to sue governments for lost trade advantages. How can governments then purport to represent their citizens? Removing democratic decision making from elected officials to managers, and a step further removed, to shareholders, is not an enhancement of democracy, nor is it clearly speaking, subsidiarity. France’s reasons for withdrawing from the MAI negotiations at the OECD are interesting in this regard. The French Prime Minister stated, “…given the recent upheaval, the sudden and somewhat irrational movements of [financial] markets, it does not seem wise to allow private interests to chew away at the sovereignty of states.” (15)

The key to understanding the MAI is the concept of “national treatment,” which requires each government to treat foreign investors in the same manner as their own nationals. What this means is that governments would lose the power to design development programs that could favor disadvantaged regions (such as Atlantic Canada or the North) or equality seeking groups (such as Aboriginal Canadians, women, the differently abled.) As well, there is concern that the mixed (private and public sector) economy which provides several social services in the provinces and municipalities could be adversely threatened. Canada’s cultural industries are an area “of particular concern.” The members of the Commission believe that “the Canadian government must affirm its right not only to protect but to actively support the development of our artists and culture.”(16)

CONCLUSION

The Social Affairs Commission of the Canadian Conference of Catholic Bishops will continue to monitor the situation, and discuss the implications of such agreements with organizations in other countries who have also raised their voices of concern. We encourage organizations and individuals to continue to reflect on the issues related to the MAI and to make their views known to the Canadian authorities in the months ahead. We commend the MAI Inquiry for creating this consultative and educational opportunity for Canadians across the country.

There are many reasons to question the current negotiations toward the MAI. These arise from our concern for the need to promote the common good in any public or economic policy, to ensure public participation in policy development, to maintain a preferential option for the poor, to promote the value of labour, and to respect the principle of subsidiarity. Through this submission to this Inquiry, and our participation in social justice coalitions, we will continue to deepen our own reflection and commitment to action in these areas.

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1. The Catholic Health Association of Canada urged Mr. Marchi not to sign the MAI until issues related to Canadian health care and social systems were addressed (see: Press Release, April 6, 1998). As well, the Catholic Women’s League of Canada passed a resolution at its annual convention in August 1998, asking the Canadian government to discontinue MAI negotiations at the Organization for Economic Cooperation and Development, assure Canadian sovereignty when negotiating at the World Trade Organization, and organize a public consultative process across Canada (see CWL Resolution 98.10, August 1998). The National Council of the Canadian Catholic Organization for Development and Peace had already written to the Prime Minister, calling for a moratorium on the MAI process (see letter of Jean-Claude Le Vasseur to Mr. Chretien, December 11, 1997).

2. The Episcopal Commission for Social Affairs, “Socio-Ethical Guidelines for Investment,” April 10, 1979; in Sheridan, Edward, S.J., Do Justice: The Social Teaching of the Canadian Catholic Bishops, Editions Paulines and the Jesuit Centre for Social Faith and Justice, 1987, p. 343.

3. Second Vatican Council, The Church in the Modern World, n. 64.

4. Pope Paul VI, The Development of Peoples, n. 22, 1967.

5. Pope Pius XI, The Reconstruction of the Social Order, 1931; Bishop Alexander Carter, Super-States and Multi-national Corporations in a Developing World Community, intervention to the International Synod of Bishops, Rome, October 20, 1971; and intervention of Archbishop Henri Goudreault to the Special Assembly of the Synod of Bishops for America, Rome, December 1997.

6. Richard Gwyn, The Toronto Star, as quoted in Andrew Jackson and Matthew Sanger (eds.), Dismantling Democracy: The MAI and its Impact, CCPA/Lorimer, Toronto, 1998, cover.

7. The recent victory of Virginia-based Ethyl Corporation, producer of the gasoline additive MMT, in a suit against the Government of Canada, is a sad case in point.

8. Ecumenical Coalition for Economic Justice, Economic Justice Report; Ethical Reflections on the MAI, Vol. IX, Number 1, March 1998, p.11.

9. Roy Culpeper, “Systematic Instability or Global Growing Pains? Implications of the Asian Financial Crisis,” Briefing, The North-South Institute, B-41, 1998, p. 2.

10. Joseph Gremillion, The Gospel of Peace and Justice: Catholic Social Teaching Since Pope John, Orbis, Maryknoll, 1976, p. 139.

11. As quoted in Gregory Baum, Compassion and Solidarity: The Church for Others, Anansi, Concord, 1987, p. 92.

12. Episcopal Commission for Social Affairs, CCCB, December 22, 1982, section 3.

13. See: John W. Foster, The MAI and Human Rights, and Roy Jones, The MAI and Labour Rights, in Jackson and Sanger, op. cit.

14. Letter of Bishop Thibodeau, op. cit.

15. Heather Scofield, “France pulls out of MAI talks”, The Globe and Mail, October 15, 1998, p. B1.

16. Letter of Bishop François Thibodeau, Chair of the Episcopal Commission for Social Affairs, to The Hon. Sergio Marchi, Minister of International Trade, March 26, 1998.