April 30, 1999

Mr Steve Moran
Department of Foreign Affairs and Trade
R.G. Casey Building
BARTON ACT 0221

Dear Mr Moran,

I am writing to you with regard to the Australian Government’s involvement in further discussions within the World Trade Organisation. The Geelong Community Forum would like to request that investment be left off the agenda for the November/December 1999 talks.

Concerns About a WTO Multilateral Agreement on Investment

Our organisation like many others across Australia are afraid that the next round of WTO negotiations will be used as a lever to introduce a similar document to the thoroughly discredited OECD draft MAI (Multilateral Agreement on Investment). I enclose, for your information, a copy of the text of our submission to the Joint Standing Committee on Treaties where we argued in the strongest terms against the introduction of the MAI. In addition to the lamentable lack of public information and consultation which was made available about the treaty, we addressed key issues under the following headings:

Given that the World Trade Organisation has substantially more member nations than the OECD, an MAI negotiated within that forum would be even more damaging to the welfare of millions of people than the original. It has always been of concern to those opposing the MAI that Third World governments would be forced to sign on to the treaty as a condition of having their debts refinanced by the International Monetary Fund; a WTO-MAI would make such a possibility much more likely.

Expropriation Rules Under Multilateral Agreements

There is every indication that a WTO-MAI would include similar expropriation rules to those outlined in NAFTA and, in a more extensive form, in the OECD-MAI. The outcome of one such expropriation case under NAFTA causes us serious concern. The Ethyl Corporation sued the Canadian Government for $251 million dollars for loss of profits because that government acted to ban their product MMT following scientific evidence that it is an environmental pollutant and neurotoxin. The government was advised that they would lose the suit, and settled for US$13 million dollars which was paid as compensation for legal fees and lost profits. Two ministers were forced to publicly deny that there was anything wrong with MMT.

There are already several other multi-million dollar expropriation suits underway in both Canada and the United States, initiated by corporations against democratically elected governments. I ask you to imagine this kind of expropriation mechanism applied to Australia. In Victoria, for example, the government has recently sold plantation logging rights in the Otway State Forest, in perpetuity, to an American corporation. This sale was declared well after the majority of Victorians had any idea that it was taking place. If a newly elected government wanted to reverse this decision, under an agreement such as NAFTA or the MAI, they would face a bill, not just related to the sale price of $600,000,000, but also taking into account the projected lost profits of the company, which could amount to billions of dollars or more.

Please Remove Investment from the Next WTO Agenda

I commend to your attention the findings of the recent Federal Inquiry into the OECD-MAI where the negotiating text was roundly condemned and described as an ‘international joke [being] played on the people of Australia.’ We cannot afford to allow a similar treaty the opportunity to see the light of day, whether in the WTO or in APEC. Please say ‘No!’ to a WTO-MAI by making certain that investment is not included in the next round of WTO discussions.

Yours sincerely,

Serena O’Meley
Geelong Community Forum