Although our focus will be on the Pacific Basin and Asian countries we will be participating fully in international mediation and peacekeeping exercises, encouraging initiatives on environmental issues and economic issue, and assisting liberation movements where appropriate. We will play our part as a full and valued member of the United Nations and its agencies and contribute to the reform of the United Nations. We support global Disarmament and Peace moves and international treaties and will actively discourage nations breaching such treaties.
Our goal in this context is to create a just world order and a sustainable global economy. In this light our policy will be to increase Australian aid to 0.7% of GDP (the international standard) and provide aid in particular for sustainable agriculture, renewable energy projects, education, self-help programs, NGO activities and humanitarian purposes. We support a moratorium on Low Income Countries debt and the waiving of such debts where repayments are unrealistic.
Although the principal focus will be on our regional neighbours the PLP recognises the continuing importance on Australia's relationship with the European Union and the countries of North and Latin America as trading partners.
The PLP rejects the New Globalism of the WTO (World Trade Organisation) based solely on commercialism and the lack of labour rights. The PLP demands the reformulation of the WTO to incorporate a strong Social Charter. The PLP demands the reformulation of WTO rules on TRIP's (Trade Related Investment Principles) and TRIM's (Trade Related Investment Movements) that benefit only the TNCs. The PLP opposes the implementation of GATS (General Agreement on Trade in Services) which includes free trade in global labour.
The PLP encourages APEC but only if a strong Social Charter is included. It will also encourage a similarly constructed Indian bloc as well as the afore-mentioned SW Pacific bloc.
The proposed MAI supposedly is to be a comprehensive agreement covering all forms of investment coming from MAI investors, including the establishment of new enterprises and the activities of established foreign-owned or controlled enterprises. Its aim is to apply MAI "disciplines" to all sectors and at all levels of participating national governments. It extends beyond traditional foreign direct investment to encompass portfolio investment and intangible assets. Further work is focusing on intellectual property rights, indirect investment, concessions, public debt and real estate (MAI Negotiating Group, OECD Council meeting, May 1997).
The PLP regards MAI as a charter of rights and freedoms of transnational corporations (TNCs) and international investors, who will have the right to enforce such rights against governments. It is a prime example of the extension of the Old Globalism based on strengthening global capitalism.
MAI is being negotiated by 29 governments of the world richest industrialised countries, members of the OECD. The proposed Treaty originated with the American Chamber of International Commerce. It would be a legally binding agreement on international investment. Once the Treaty is up and running Low Income Countries (LICs) would be "invited" to sign. Negotiations have been under way since May,1995, and are due to be completed in October, 1998. The PLP's position is that the agreement has been designed to facilitate trans-border investment flows for the benefit of TNCs. Low Income Countries (and other non-OECD countries) have not been consulted and whether or not they sign the Treaty would affect them adversely.
The Treaty would certainly severely restrict the ability of national governments to regulate foreign corporations. It sets up a disputes settling procedure which gives corporations the right to challenge national laws and seek payment of damages. Formally the Treaty is made between governments and the OECD. Decision-making and dispute resolution processes would subsequently be a matter between governments and (foreign) corporations. Thus the sovereignty of the state as well as the very existence of democratic rule making in the national state would be (further) impaired.
The MAI Negotiating Text (February, 1998) describes extensively the proposed treatment of investors and investments. This would be extremely favourable for investors. This is the most daring and arrogant attempt by international capital to exploit international resources and labour under the disguise of "development". Signatories to the Treaty cannot withdraw from it until after five years after which its provisions would continue to be in force for another 15 years.
There are already many critics in most of the 29 countries representing the Contracting Parties. The scandalous lack of public participation during the negotiating process has emerged as a major criticism by itself. The decision-making process has been both secretive and undemocratic.
Much of the language in the draft MAI is resented by many critics eg. where mention is made of "non-conforming measures", existing restrictions which would be "rolled back" after a period of time in order to achieve full "liberation" of investment (Commentary to the MAI Negotiating Text, February, 1998). The PLP does not regard a Treaty which aims to give international capital unfettered rights at the expense of national sovereignty as "liberation". To the contrary. Major decisions about the fortunes or otherwise of such a state would be made increasingly in the boardrooms of transnational corporations and by international monetary and financial agencies. MAI would be a further dimension of the growth of regional international trade agreements accompanied by the growth of international economic regulation of GOVERNMENTS, NOT OF TNCs. Ranald (1998) draws attention to the MAI draft text where it refers to MAI "disciplines" applied to governments (OECD, 1998:89).
The basic underlying assumption of the MAI agreement is that open, free competition between national and multinational sources of finance will improve the availability of finance for global economic growth. In its undistorted competition approach to movements of finance capital, it is closely related to other trade agreements already in place, like the North American Free Trade Association (NAFTA) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), now embodied in the World Trade Organisation (WTO). MAI goes much further than NAFTA though. The Canadian scholar Marjorie Cohen (1997) has argued that NAFTA has not been good for Canada in terms of net flow of investment or employment creation. She also identified some major distinctions between NAFTA and MAI in that MAI is much more inclusive in terms of definitions of investment and investors.
Secondly, MAI would cover sub-national governments, including those at the local level, in a more expanded way. Thirdly, in MAI there would be no reservations for environment and culture - or only on temporary basis.
The mechanisms for enhancing and protecting the flows of finance capital between various nations are the International Monetary Fund (IMF) and the World Bank (WB). These two bodies in part act as the representative bodies of the finance capital of the large blocs. At present most financial investment capital emanates from large corporations in the United States (US), Japan, and the European Union (EU), and the majority of it still flows mainly between these large blocs.
The WTO has, as part of its mandate, the cooperation with the IMF and the WB and other multinational institutions to obtain coherence in global economic policy-making (WTO, 1995). It is the nature of the IMF and WB to look to the needs of what they call the global economy, rather than to the needs of individual member states. The needs of the global economy are being defined by those large and powerful corporations and governments which dominate them. The WTO, for example, is dominated by the US, Canada, Japan, and the EU corporate interests. Its legal processes are binding on all signatory states, and in effect force members to comply with its laws, regulations and administrative procedures, even if such conflict with national states' own laws, regulations and administrative procedures. There is no room in the current WTO structure for Non-Government Organisations (NGOs) or civil society to participate in its rule-making.
The PLP's position is that the claimed economic advantages of finance capitalism are grossly exaggerated. Distinguishing between productive investment and speculative investment the PLP notes that much international investment is highly speculative (perhaps over 90%) and actually impoverishes many national states at the expensive of the citizens while creating higher levels of unemployment. Furthermore, almost everywhere elaborate schemes are in place to avoid taxation adding to the overall negative impact. The practice of transfer pricing is well-known. The MAI would have the effect of exacerbating such trends and problems thereby further strengthening the role of the transnational corporations at the expense of the national state and its citizens.
National environmental laws may be found contrary to the principles of the MAI. The lack of progress by corporations to limit their damaging impact on the environment following the international Rio de Janeiro Summit, and their subsequent undertakings, lend much weight to environmental concerns of such a Treaty.
Human Rights , Labour Rights and Cultural Rights groups are similarly alarmed by the prospect of having to put up with investors whose track record in these areas in other parts of the world does not stand up to conditions prevailing in the home country. Fears of cultural imperialism were voiced strongly in France. Other examples of responses by critics in other countries can be found on the Internet where an explosion of information on MAI has successfully forced the negotiators on the backfoot. After more than two years of silence on the topic the Australian Treasury issued a long list of possible exceptions entitled: "Australia: revised schedule of preliminary reservations" (October, 1997). These reservations were prepared "on the assumption that there will be general exceptions for tax measures, national security, public order, health and quarantine measures , national industry and professional standards". The practicability of effecting such exceptions in relation to the designs of the proponents of MAI will no doubt prove to be very problematical . Ranald (1998:14 &15) has also demonstrated that the existing limits on foreign investments as well as the existing industry development arrangements are largely incompatible with the provisions of MAI.
However, proposed national 'exceptions' WILL NOT make the Treaty acceptable. Under the draft Treaty these are defined as 'non-conforming measures', to be done away with. Even if the OECD does accept the possibility of permanent 'exceptions', these will be constantly undermined by the 'race for the bottom' that can only intensify when the MAI is introduced.
One of the most worrying aspects of the proposed Treaty, which has received little attention (except from AUSBUY), is the position of small business and small farms, from such liberalisation as is intended. Particularly instructive here is the socalled "economic miracle" which Brazil experienced between 1964 and 1972. In 1964 a group of radical but uninformed Generals took over control of Brazilian Government, tore up the Constitution and embarked on a socalled "Open Door Policy" for foreign corporations. Ostensibly Brazil enjoyed remarkably strong economic growth in the period following (on average around 9%) but the exercise just about smashed the Brazilian small business sector which was Brazilian-owned. In addition it increased economic and social inequalities, resulted in an underclass, increased unemployment, poorer social services and increased mortality rates. More money flowed out of the country than came into in the form of foreign investment (this situation was checked from 1973 onwards).
The Australian small business sector is extensive and it is Australian-owned. It is an important sector of the economy. However many small business operators are already struggling and could best be regarded as part the proletariat of the late 20th century. Small incomes, very long hours, many failures are taxing the small business sector to the limit. Some operators may see themselves as small capitalists, described by Marx as the "petit bourgeoisie", but the reality is that they are non-wage workers. Almost everywhere the growth of big business and corporate power has damaged the small business sector. Yet, the roles of small business and small farming are extremely important for the economic and social health of a society. An Open Door Policy for corporate investment, as proposed in MAI, would be disastrous for Australia along the lines of the Brazilian example.
There is absolutely no guarantee that more investment creates employment, whether it is Australian owned or overseas owned investment. Eg. the case of Australian banks, presently increasing their investment in technological capital , and yet shedding staff in massive numbers (22, 000 over a five year period), is good indication of this fact. Trickle down theories of employment creation have not been empirically proven. Tertiary education critics fear the potential massive imports of commercialised higher education in a climate of declining public funding for tertiary education. Tax specialists have demonstrated that transnational corporations pay very little or no tax in Australia which is already costing the Government hundred of millions of dollars annually.
The idea that Australia is "inevitably" caught up in this kind of globalism, which essentially benefits the large transnational corporations, is seriously flawed. The PLPs position is that THERE IS NOTHING INEVITABLE ABOUT THAT. There may be some withdrawal of foreign capital if Australia decides not to be a Contracting Party but this will bring benefits as well. The PLP aims to end the dependency syndrome, which it at the root of this thinking, and replace it by Australian inventiveness, enterprise, independence and renewal. The conditioning process, which make Australians believe that the trend is "inevitable", is perpetrated by most of the private sector media, the career politicians of the major parties and at some universities, must end.
The decision for Australia to sign, or not to sign is likely to be made in the near future. On 29th April it was decided by the OECD in Paris to delay the signing until October, 1998. The international Internet campaign scored a decisive victory bypassing the mainstream media effectively. The PLP's position is that Australia doesn't need this Treaty at all. Australia needs a Treaty which regulates TNCs much more tightly than has been the case hitherto.
Attempts to formulate an alternative MAI should be examined carefully by the PLP. One such proposal has come out of Canada recently. However, socialism has always had an agenda for the world's resources to be shared for the benefit of mankind everywhere. We would support protection of the environment everywhere, fair trade, human rights in every country, and free education for all citizens. The international character of socialism goes back more than 100 years. Socialists were the first to expose the international nature of capitalist exploitation, colonialism and ne-colonialism and to provide remedies and alternative strategies to enhance the dignity and emancipation of human beings rather than lining the pockets of distant shareholders and grossly overpaid corporate executives.
To that end the PLP's foreign policy is aimed at supporting movements, trade unions and liberation organisations which promote such ideals as for instance in East Timor, Latin Americans countries, Kurdistan, etc. It is also obvious that such organisations as the WTO and the OECD have emerged as the opponents of such ideals controlled as they are by the combined financial interests of large TNCs and their shareholders.
The new regionalism shall incorporate the extension of the broad vision to our South West Pacific neighbours. In particular: