By Jenni Devereux
Under the draft terms of the Multilateral Agreement on Investment (MAI) being designed by the Organisation of Economic Cooperation and Development, transnational companies will gain the unrestricted right and freedom to buy, sell and move their operations around the world wherever and whenever they want with a minimum of government intervention and regulation.
The 28 members of the OECD have been negotiating the agreement largely in secret. In Australia, the government has not initiated any public discussion on the MAI.
The MAI has been called "the constitution for a single world economy". It restricts the ability of governments to act on behalf of their citizens by: outlawing national limitations on the access of foreign capital to government contracts and privatisation programs; wiping out national merger controls and anti-trust legislation enforcement procedures; vetting national taxation and other economic and labour market policies and programs, including affirmative action and equal opportunity programs, and vetting environmental protections, natural resources, and land and sea rights of indigenous peoples, as well as education, health and social services, cultural industries and job creation.
It also makes it illegal for countries, states and localities to screen foreign investment capital, restrict where it locates or place conditions on investors.
The MAI will make it even easier for multinational investors to set up export production plants characterised by poor working conditions, few (if any) labour rights and low wages.
The MAI will confer on private investors the same rights and legal standing as national governments to enforce the terms of the treaty. This will give corporations the right to sue governments for compensation if a national law or practice limits their freedom to invest or divest.
Economic power
Transnational corporations already conduct more than 80% of the industrialised world's trade, and control 80% of the world's land that is cultivated for export-oriented crops.
Of the world's 100 largest economies, 47 are now transnational corporations: the vast majority of nations are smaller and less powerful than giant companies like AT&T, Mitsubishi, American Express and Northern Telecom.
In every sector, companies are merging and a handful dominate the large sectors, like airlines, telecommunications and information technology, banking, pharmaceuticals and oil.
Ford's economy is bigger than those of South Africa, Saudi Arabia and Norway. Toyota too is bigger than Norway. Philip Morris's annual sales exceed New Zealand's GDP. Wal-Mart is bigger than 161 countries, including Poland, Israel and Greece. Mitsubishi is larger than Indonesia and General Motors is larger than Denmark.
The largest 200 transnationals now control more than a quarter of the world's economic activity. Their combined sales are bigger than the combined economies of all countries minus the biggest nine; that is, they surpass the combined economies of 182 countries.
With a combined revenue of $7.1 trillion, these transnationals have almost twice the economic clout of the poorest four-fifths of humanity, whose combined income is only $3.9 trillion.
They are also net job destroyers. All together, they employ less than 0.3% of the world's people.
These companies seek what they call a global level playing field. They want to be free to move across borders with little interference; to be governed by the lowest common standards and regulations regarding human safety, environmental protection and social security; and they want governments to get out of the way. This is what the MAI has been designed to achieve.
Women and the world economy
According to the World Bank, women make up 40% of the world's workforce in agriculture (women farmers in the underdeveloped countries grow at least 50% of the world's food), 25% in industry and 33% in services.
United Nations' figures show that the world's women contribute 66% of the hours worked each day, but earn only 10% of the world's income and own only 1% of the world's property.
Of the world's 1.3 billion poor people, 70% are women. In the last two decades, the number of rural women living in absolute poverty has increased by 50%.
Supporters of the MAI claim that the unfettered operation of global capital will raise global living standards, but the evidence indicates that, rather than ameliorate the economic powerlessness of the vast majority of women, such treaties are major contributors to it.
The globalisation of production has done nothing to create jobs or offer significant opportunities for women's advancement. In addition, while these agreements further increase the market share controlled by transnational corporations, they fail to secure for the majority of women the most basic access to land, capital and training.
Programs which provide poor women with access to the capital necessary to achieve some degree of economic autonomy simply cannot succeed if small, women-owned businesses are forced to compete with multinational investors. When faced with the choice of buying inputs from small, local suppliers or importing them from a subsidiary, multinationals usually opt for the latter, with often devastating consequences for locally owned businesses.
Further, the argument that free trade benefits women by generating jobs for previously unemployable, unskilled labourers, and allowing them to escape oppressive domestic roles to enter the formal workforce, doesn't stand up to scrutiny.
Studies of Mexico since the North American Free Trade Agreement was signed, for example, show that sexual harassment and discrimination are rampant, while wages and the rate of unionisation are low. Recently, the US Department of Labor had to investigate Mexico's enforcement of its labour laws after reports that female manufacturing workers are routinely screened for pregnancy, and summarily dismissed if found pregnant.
According to the US-based Institute for Policy Studies, worker turnover is extremely high, thus preventing women — who are over-represented in the export manufacturing workforce — from using such work as an economic stepping stone.
This is not confined to Mexico.
Studies of Chinese workers making Nike and Reebok shoes show that 90% of the workforce are women aged 17 to 23 and the stories of the exploitation of young women in the clothing and footwear factories operated by the transnationals across the Third World are hair-raising and heart-breaking. Nike has recently been exposed for serious and systematic abuses of its Asian workforce — half a million workers, most of whom are women.
In short, the global economic strategies of the transnationals have not improved the economic lot of most women. Nor are they a legitimate economic development strategy for nations. The benefits have been to the transnationals.
For instance, according to the US Bureau of Labor Statistics, hourly wage costs for production workers in manufacturing in Mexico in 1996 (post-NAFTA) were one-eighth of those in the US. This is a decline from 1975 (prior to NAFTA), when wages for Mexican workers were almost one-quarter of those for US manufacturing workers.
The provisions of the MAI will limit the capacity of nations to address the vast disparities in economic wealth among their citizens, including the increasing impoverishment of women and children, especially in the Third World.
As well, while international institutions like the United Nations, though its UNIFEM Program for example, attempt to fund programs encouraging sustainable economic development for the benefit of women, the countervailing trend of export manufacturing will be reinforced by the MAI, probably to the detriment of these programs.
Women's development groups around the world recognise the threat posed by further limitations on the policy-making power of local, state and national governments to address the secondary labour market and social position of women.
The OECD plans to have the MAI finalised earlier this year were stopped by anti-MAI groups, which spread previously clandestine information and organised public opposition.
There is now an opportunity for people to initiate a broad public debate on the MAI and ensure that the potential danger the MAI poses to the economic well-being of most of the world's women is understood.
[Abridged from a paper presented to the Women's International League for Peace and Freedom seminar "Women, Human Rights and the Global Economy" on August 31.]