<nettime> Summary OECD's MAI negotiating group

[Barry Coates <Barry.Coates@wdm.org.uk>]

Dear friends,

Developing country issues in the MAI are hotting up. This E-mail sets out
the results of a recent informal negotiation amongst most of the OECD's
MAI Negotiating Group, and gives a summary of the work that will be
undertaken by the OECD Secretariat on a study of the MAI's impact on
developing countries (or perhaps more accurately, a study that will show
developing countries what a good idea it would be to accede to the MAI).
It concludes with some ideas for follow-up by
NGOs/researchers/academics/MAI saboteurs.=20

1. MAI "Informal" Negotiation

There was an informal meeting of MAI negotiators in London on 13th July to
discuss developing country accession. This was not part of the April
Ministerial statement and managed to escape public or media scrutiny.
Despite the break in negotiations, most countries sent a representative.
We have recently received a letter from the UK negotiator about the
meeting. The following is their note of the meeting (with a few
explanatory notes in brackets):=20

"The meeting was informal, so there is no formal record. Both DAFFE
[Directorate for Financial, Fiscal and Enterprise Affairs] and DCD
[Development Co-operation Directorate] attended from the Secretariat. They
presented some ideas they had on possible follow-up work to the Fitzgerald
report [undertaken for the UK government on the likely impact of the MAI -
see below]. They propose a mixture of general analysis and case studies to
look at how developing countries might be affected by the MAI and the work
that might be needed within developing countries to build up the capacity
to join. The meeting essentially endorsed the Secretariat's proposals for
further action.=20

In discussion, those present covered some of the main issues that the
negotiators are likely to face regarding developing country accession.
There was general agreement that we could not talk about "developing
countries" as a single category - Brazil, Latvia and Uganda were as
different form each other as they were from the OECD - and therefore could
not talk about a single and separate regime for developing countries.
There was a widely held view that the distinction between the full
negotiating partners and the current observers (Brazil etc) was becoming
increasingly narrow and that the current observers would probably be
treated as founder members in the same way as would the UK.=20

The negotiators reminded themselves of the reference in the Consolidated
text to the criteria that might govern accession by non-members (possible
country-specific exceptions to accommodate development interests, possible
time-limited exceptions to allow for reforms of a domestic regime, etc).
there was a first look at what might be regarded as the "core elements" of
the MAI - the minimum that any member would have to sign up to. The
discussion was inconclusive, with a number of delegations pointing out
that this issue was still up for grabs within the OECD. For similar
reasons, no conclusions were reached on the issue of the kind of
exceptions that might be regarded as acceptable.=20

There was also a discussion of "outreach"activity. The general view was
that OECD members should not feel constrained from supplementing the
Secretariat's work with activity of their own.=20

In conclusion, I think the meeting provided a useful forward step on
dealing with this question. I am sure the negotiators will be returning to
this issue once we have the first fruits of the Secretariat's work in the
autumn. You are aware of the UK's continued commitment to ensuring that
this issue is taken seriously and that the outcome is favourable to
developing countries."=20

Signed by Tom Smith, Head of the International Investment Unit, Department
of Trade and Industry [The new UK negotiator on the MAI].=20

Interpretation: The meeting was called by the UK to publicise their report
and in an attempt to deflect criticism by securing an agreement that
developing countries would be treated favourably under the MAI.
Specifically, there was the proposal that developing countries be granted
a relatively automatic waiver for a number of the MAI's provisions (such
as performance measures).=20

However, a number of OECD negotiators (or their proxies) resisted any such
blanket provisions for developing countries. The US seems to have been in
the forefront of the hard liners. The issues seem to have been
contentious.=20


2. OECD Secretariat study on the impact of the MAI on developing countries

I have a copy of the OECD Secretariat's note, "setting out the background,
objective and outline of the Secretariat study on the development
implications of the MAI, requested by the MAI Negotiating Group at its
meeting in April 1998. The outline takes account of proposals made by
several delegations. It is provided to MAI delegations for information and
comment." DAFFE/MAI(98)25, dated 28 July 1998 [please contact me for a
full copy - only print copy available].=20

The following cites some of the key points of this note (8 pages).=20

Background: "This request grew out of comments by several delegations that
the accession of developing countries to the MAI would be desirable. Not
only will this advance the value of the MAI itself, it will promote
economic development in those countries by enhancing investor confidence
and the credibility of economic policies through adherence to binding
international rules.=20

The UK delegation has already presented the results of a consultant's
study on the development implications of the MAI to the Negotiating Group
and the Japanese and Norwegian delegations have emphasized the importance
of non-member accession to the MAI. Subsequent proposals for the
Secretariat study have been provided by the UK, Norwegian and Swedish
delegations.=20

The purpose of this outline is to make sure that all relevant questions
are raised. It will not be possible to provide satisfactory answers on all
matters by October. the proposed case study approach, recommended by
several deegations, will imply an ongoing and iterative programme of work.=
=20

The objective of the study is to assess the implications of the MAI for
developing countries, noth those that join and those that do not. It will
assess the extent to which the MAI is consistent with development
objectives and how it might actually promote them. The study will also
consider the possible terms of developing country accession to the MAI and
discuss what are legitimate development interests and how they might be
accomodated by country specific exceptions and transition arrangements."=20

[It is interesting to note that the relatively neutral approach to the
study is completely undermined by the extremely one-sided outline of the
study.]

"The Introduction will point out the extent to which there is now a
consensus on the role that foreign direct investment (FDI) can play in
economic development and the need for a "stable, supportive, effective and
transparent legal framework." It will argue that the debate has now
shifted from the ends -- private sector led development -- to the means:
attracting and enhancing the role of foreign firms, including those
controlled by expatriate investors".=20

[Whose consensus?! There are some spectacular leaps of faith in that chain
of logic.]

Part I: FDI Trends and Policies in Developing Countries

(1) FDI Trends [usual arguments, plus the suggestion that much of the
developing world is not as marginalised as everyone considers].=20

(2) FDI Policies - "This section will serve to demonstrate to what extent
there is now consensus, in both the OECD and the developing world, about
the potential benefits of openness to FDI." [showing what could be
regarded as a slightly biased starting point for this rigorous
assessment!].=20

Part II: The Benefits of adhering to the MAI for developing countries

"This section will address the key question of why developing countries
should sign on to the MAI."=20

(1) Rules

 - the importance of Bilateral Investment Treaties [arguing the much of
the MAI is already included in BITs]

 - multilateral investment rules and economic development: this will
discuss the potential benefits that developing countries hope to achieve
in exchange for adhering to binding multilateral rules, including the
amount of investment to those acceding and those not acceding, the quality
of inward investment, the impact on domestic investment and the
sustainability of investment. [Each of these points are framed in a way
that presumes a certain answer].=20

(2) Liberalisation

"An integral part of the MAI is the locking in of existing levels of
openness and providing a means toward further liberalisation among
signatory countries."  [Yes, indeed; succinctly put!].=20

"Unlike in trade agreements, many developing countries do not have
multinational enterprises of their own which could benefit from reciprocal
privileges. As a result, these countries signing the MAI would effectively
be granting market access on a unilateral basis to potential investors
from signatiory countries. They will therefore only do so if they perceive
it is in their own best interests."=20

[This is the nub of the OECD's problem. They need to show it is in the
interests of the host country. There is, however, another way to get
developing countries to sign up, which is by applying political pressure
on them to do so.  This is already happening, with many examples including
the proposed US Growth and Opportunity Act and the EU's negotiating
mandate for the Lom=E9 Convention].=20

"This...requires making the case for the economic benefits of an expanded
role of foreign investors in the local economy....will draw on the
arguments contained in 'Foreign Direct Investment and Economic
Development' (OECD 1998)  [Has anyone out there done a critique of this
report or know of one?]

"This section will also provide an inventory of those measures adopted by
developing countries which they are least likely to liberalise and discuss
the motivations for such measures in terms of development strategies. This
inventory will provide a basis to discuss the possible terms of accession
of developing countries in the next section."=20

Part III: Developing country accession to the MAI

Possible accession terms, including transition periods, level of legal and
institutional infrastructure, investor-State dispute settlement, the broad
definition of investment under the MAI and developing countries' views on
the emerging provisions on labour and environment.=20

"Should there be any incentives to encourage developing countries to
adhere? If so, what form should they take?" [The Fitzgerald report,
commissioned by the UK, suggested that enhanced debt relief should be made
conditional on developing countries acceding to the MAI. This is probably
the type of incentives that the OECD is thinking of. Or it might be more
aid for countries signing the MAI. In any form, it should be rejected.]

Part IV: Case studies of individual developing countries

These are likely to be drawn from existing material:=20
 - OECD members and MAI observers that are classified as developing
countries
 - Recent OECD Secretariat studies of Indonesia, Malaysia, Philippines and
Thailand
 - investment guides from countries in Eastern and Central Europe and
former CIS
 - reviews of the investment climate of poorer countries undertaken by the
Foreign Investment Advisory Service.=20


Follow-up

1. Some resources available are:  - a copy of the Fitzgerald report on the
MAI (saying that the MAI will be good for developing countries) from the
UK Department for International Development enquiry@dfid.gtnet.gov.uk - a
copy of WDM's critique of that report, available in text or Word form from
me here <barry@wdm.org.uk> or on WDM's website http://www.wdm.org.uk - a
copy of WWF-UK's critique of the environmental aspects of that report from
nmabey@wwfnet.org - North-South Development Monitor (SUNS) report on the
NGO-Ambassadors meeting on 10th June 1998 - briefing papers from Third
World Network, including issues 184/5 and 186 of Third World Economics;
visit TWN website at <http://www.twnside.org.sg>

2. If you are in the OECD, please press your governments to ensure that
the OECD's study outline is revised to look objectively at the likely
impacts on developing countries, rather than the biased approach embodied
in this outline.  You should also press them to call for the involvement
of developing country governments, NGOs and researchers, and OECD NGOs and
researchers. As UK academics are doing, you may want to call for a seminar
to discuss the Fitzgerald report. Depending on the positions of different
government departments, you may choose to direct your lobbying to the
Ministry responsible for International Development.=20

3. If you are from a developing country, you should let your government
know that this is going on and suggest that they get involved. Many
governments have not been sent the Fitzgerald report. It would be very
helpful if you could send them one or both of the critiques of it. If you
have done any research on the MAI or FDI, you could send it to the OECD
Secretariat (although from the study outline, it seems unlikely they will
take much notice). Send to Rainer Geiger, OECD DAFFE, 2 Rue Andr=E9 Pascal
75775, PARIS CEDEX 16, France.=20

4. If you are interested in presenting an alternative analysis, I would
like to work with others to develop an informed and credible study on the
likely impact of the MAI on developing countries. Its main purpose would
be to correct some of the misconceptions about FDI and the MAI, and to
undermine the OECD study.  Please let me know if you are interested in
joining with me and others on such a study, and if you have or know of
good analysis of some of the problems with FDI, examples of the types of
policies that would be ruled out by the MAI, and the likely impacts of the
MAI on developing countries.=20

As a last point, I think that we are nearing the stage when the
negotiators will try to pick off NGOs and other critics through changes to
the draft text.  However, since industry associations have identified
developing countries as the real targets for an MAI, the accession of
non-OECD countries are central to the agreement. Yet the decision by OECD
governments to exclude non-OECD developing countries from negotations is
indefensible. Therefore, I hope your research or campaigning on the MAI
will resist the urge to engage in changes to the MAI's draft wording or to
call for extra accession provisions. The MAI is not an acceptable basis
for an international agreement and should be abandoned.  There is some
great work going on to develop alternatives. But they should not be based
on the MAI.=20

For Immediate Release - 3 August 1998 MAI Outlaws New Rules to Benefit
Fishing Communities

According to the World Wide Fund for Nature (WWF) the new rules recently
announced by the Government to protect British fishing communities are in
direct conflict with an international investment agreement, the
Multilateral Agreement on Investment (MAI).  As a result of this conflict,
foreign fishermen will be able to sue the UK government because the new
rules discriminate against them.=20

The new fishing rules are aimed at ending =EBquota hopping=ED where primari=
ly
Spanish or Dutch owners buy a licence to fish against British quotas,
while landing their fish at home ports.  The new conditions, applicable
from January 1 1999, will insist that to receive a fish licence 50% of any
catch must be landed in the UK or 50% of the crew must be resident in the
UK or the vessel must incur a given level of operating expenditure in the
UK.  The rules are meant to ensure that a major proportion of the economic
benefits from the UK=EDs fish stocks comes into the UK, even if they are
fished by foreign owned vessels.=20

However, these same rules are outlawed by the MAI as discriminatory
=EBperformance requirements=ED which hurt foreign investors. The MAI bans
performance requirements on foreign investors which specify the purchase
of local goods, levels of local employment and levels of exports.=20

To avoid this legal clash the Government will have to obtain an exception
for these rules from the MAI.  If the MAI had been signed in April 1998,
as the UK Government had intended, it would have been impossible for the
new fishing rules to be adopted at all.=20

WWF supports the new fishing measures introduced by the Government as an
important way of ensuring sustainable fishing by giving local communities
a stake in conserving fish stocks.=20

 =ECUnless the MAI is reformed this treaty threatens to destroy this new
protection for UK fishing communities,=EE said Nick Mabey, WWF-UK=EDs
Economics Officer.  =ECThis conflict clearly indicates that the Government
does not understand the danger that this treaty poses to sustainable
development.=20

The Government must immediately debate the MAI in Parliament to resolve
these issues. he added.=20

The ability of the MAI to circumvent laws which promote sustainable
development also demonstrates how the MAI will be used by rich OECD
countries to gain unlimited access to less well protected fishing grounds
in developing countries, ruining the livelihoods of small fishermen and
destroying fish stocks.  =ECIt=EDs a clear case of double standards=EE said=
 Nick
Mabey.  =ECThe UK Government might be able to gain an exception to benefit
UK fishing communities, but the treaty will allow them to deny the same
opportunities to poor fishermen in developing countries.  The Government
must amend the MAI so that it cannot override laws that protect the
environment and local communities,=EE he added.=20

Ends

For further information, please call:=20

Nick Mabey - WWF-UK Economics Officer : Tel: 01483 412 548 Ed Matthew -
WWF-UK Media Officer : Tel: 01483 412 379 Mobile: 0468 867 274

For your information: the NGO consultation on the MAI which the European
Commission's DG1 sent around invitations for back in May has now turned
into a 'dialogue' with 'the Presidency of the European Union, together
with the Commission and the Member States' on September 22th in Brussels.
Quite a crowd, isn't it? Here's the invitation which Towards a Different
Europe received earlier this week, from the Austrian ministery of economic
affairs.=20

Austria 1998 Presidency of the European Union

Federal Ministery for Economic Affairs

Stubenring 1
A-1011 Vienna
Austria

Tel: +43 1 71100/5180, Fax: +43 1 715 96 51, E-mail:
manfred.schekulin@bmwa.gv.at

Name/Contactextension: M. Schekulin/5180

Reference Number: 25.840/39-II/5/98

Ref.:  MAI: consultation and assesment: invitation to a dialogue meeting
on 22 September


Dear Mr. Hoedeman

The Community, as well as the Member States, have been participating since
the start in 1995 in negotiations on a Multilateral Agreement on
Investment (MAI)  which are taking place in the framework of the OCED.
During these negotiations the MAI Negotiating Group, but also the
Commission Services and the Member States authorities have held
consultations with Parliaments, the business community, the trade unions,
and with representatives of relevant interests, on the developments in the
negotiations.=20

At the 1998 OECD Ministerial it was decided to allow for a period of
assesment and further consultations, in particular with interested parts
of civil society, taking into account progress made, difficulties
remaining and concerns voiced.=20

In order to follow-up on this decision at the European level, the
Presidency of the European Union, together with the Commission and the
Member States would like to invite you for a dialogue on the MAI and in
particular on the issues which have given rise to concerns, i.e. the
social, environmental, cultural and development aspects of the MAI. The
objective of such a meeting is for representatives of all parts of civil
society to help us on the government side to better understand your
concerns and for us to answer any questions as to where negotiations now
stand. We envisage an open and wide-ranging debate.=20

A more detailed agenda will be transmitted to you as we come closer to the
meeting. It will take place i the building of the Council of the European
Union, Rue de la Loi/Wetstraat 170 on 22 September, starting at 9.30.
Given the expected number of participating organisations, we would
appreciate if your representation would be restricted to 2
representatives.=20

I would appreciate if you could let the Council Secretariat (Mr. Oliveira,
Tel:  +32-2-285 66 19, Fax: +32-2-285 7374) know by 8 September if you
intend to participate in this dialogue, an if so, please transmit the
names of the individual(s) who will attend.=20


Yours sincerely,

M. Schekulin

--------

Mega-mergers and the MAI

        This is the year of the mega-merger, with records being broken
before the ink is dry on the previous one.  The decision to combine
Daimler-Benz and Chrysler two months ago was the largest industrial merger
in history-- until yesterday. Now we have British Petroleum and Amoco
merging to form the biggest oil producer in the US.=20

        Six thousand employees will be thrown overboard, but don't expect
any of these "efficiency" gains to show up in the form of lower prices to
consumers. In fact the opposite is more likely, when the new giant flexes
the economic muscle of its increased market power. The big winners are the
investment bankers who brokered the deal and the stockholders, as
evidenced by the soaring stock prices of both companies that greeted the
announcement.=20

        But there are worse problems with these deals: in particular, the
concentration of political power that they produce. Consumer and
environmental groups are already concerned that a wave of mergers in the
oil industry could solidify the powerful anti-environmental alliance that
these giants can mobilize around such issues as global warming.=20

        It is also worth noting that these last two record industrial
mergers combined American with foreign firms. These trends are often
believed to be the inevitable result of such unseen forces as "technology"
and "globalization,"  but this not true. Our own government has been
leading the worldwide effort by multinational corporations to rewrite the
rules of the global economy in order to facilitate such deals.=20

        One of these efforts is the Multilateral Agreement on Investment
(MAI), which our government has been negotiating for almost three years.
This agreement would initially include the 29 industrialized countries of
the OECD (Organization for Economic Cooperation and Development), and then
be opened to the rest of the world. It would create a host of new rights
and privileges for international investors, and make it more difficult for
governments to prevent or regulate international megamergers like BP Amoco
or Daimler-Chrysler.=20

        So long as our government continues to place the interests of
multinational corporations ahead of the public interest, we can expect
more such mergers, with similar results.=20
------------------------------------- Name: Mark Weisbrot E-mail:
<weisbrot@rtk.net> Preamble Center for Public Policy 1737 21st Street NW
Washington DC 20009 (202) 265-3263 (offc)  (202) 333-6141 (home)  fax:
(202)265-3647 www.rtk.net/preamble

July-August 1998 - The Social Crediter Official Journal of the Social
Credit Secretariat - The 1998 Bilderberg Meeting.=20

by Alan Armstrong, with Alistair McConnachie at Turnberry.=20

Punch magazine's report of May 23-June 5 continued, "Few have heard of the
Bilderberg Council.  But its 120 members are some of the most powerful
people on the global stage.  It meets amid unparalleled secrecy to discuss
the future of the world."=20

Punch was referring to the meeting held at Turnberry Hotel, near Girvan on
the West coast of Scotland on Thursday 14th - Sunday 17th May 1998. Until
very recently, any reference to even the existence of the highly secretive
Bilderberg Group was greeted with great skepticism by the world's media.
Punch, along with the Mail on Sunday, the Scotsman, the Scottish Daily
Mail, the Scotland on Sunday and The Social Crediter, met outside the
gates of Turnberry to find out what was going on.=20

The 123 participants at the meeting, conducted as always in secrecy and
accompanied by a powerful police presence, included Lord Carrington,
Chairman since 1990, UK Defence Secretary George Robertson, William Hague
Leader of the Opposition, Kenneth Clarke ex-Chancellor the Exchequer,
Henry Kissenger and a great clutch of other heavyweight movers and shakers
from the world of international banking, industry, multinational
corporations, and senior politicians, of whom some are still in power and
some others showing real potential!=20

Investigatory journalist Robert Eringer, in his book The Global
Manipulators (Bristol, England: Pentacle Books, 1980) notes that "The
steering committee certainly has an amazing eye for choosing guests who
are on the way up. Most of the current leaders of the West have emerged
from the depths of Bilderberg ... Every British Prime Minister of the past
thirty years has attended Bilderberg ...(and) Denis Healey was an early
member of Bilderberg and was on the steering committee long before he
became Chancellor the Exchequer."  Tony Blair attended the meeting on
23-25 April 1993 at Vouliagmeni in Greece when he was Shadow Home
Secretary.=20

Why the Secrecy?=20

Punch noted, and Bilderbergers would not deny, that the Council meets
"amid unparalleled secrecy to discuss the future of the world." But why?
In this context, Robert Eringer wrote to David Rockefeller, Chairman of
Chase Manhattan Bank to enquire about Bilderberg.  An assistant directed
him to a Mr. Charles Muller, a Vice President at Murden and Company, "the
organisation which assists with the administration of American Friends of
Bilderberg, Incorporated." (p.  11) Muller sent him a printed message
which included the suggestion that it was, "In order to assure perfect
freedom of speech and opinion, the gatherings are closed and off the
record. No resolutions are proposed, no votes taken, and no policy
statements are issued during or after the meetings."=20

Eringer subsequently established that in fact this is not so. He managed
to obtain a copy of a "Strictly Confidential" record of the meeting held
in Barbizon, France in March 1955 and one of the September meeting in
Garmisch, West Germany the same year, which records that "Participants in
this conference may, in light of the consensus of opinion expressed during
the discussions, be able to pass these views on to public opinion in their
own spheres of influence, without disclosing their source." (p. 30)=20

Finally, in a letter to Eringer, one time member Sir Paul Chambers wrote,
"I am under obligation not to disclose anything about the Bilderberg Group
to anybody who is not a member of that group. I am very sorry that I
cannot help, but I am clearly powerless to do so and it would be wrong in
the circumstance to say anything to you about Bilderberg."=20

There is enough here to allow us to insist that if there are grand
strategies to be developed, presumably in the "best interests" of the
world's peoples, they should be made in forums that are subject to full
democratic scrutiny and accountability.  Not behind locked doors at
private meetings of a largely self-appointed elite establishment. Why
should democratically elected representatives attending these meetings
feel it necessary to maintain complete secrecy over what is discussed?  It
is also open to question whether the British Police Force should have
provided armed security for such a "private meeting" or whether an Army
helicopter should have been used to ferry Defence Secretary George
Robertson. According to his spokesman, "He was fulfilling an official
engagement as Secretary of State for Defence and, as such, transport was
met by public expense." (Mail on Sunday, Night and Day supplement, June
14, 1998, p. 15.)=20

The Turnberry Agenda

According to the official PRESS RELEASE Bilderberg Meetings, dated May 14,
1998: "Among others the Conference will discuss NATO, Asian Crisis, EMU,
Growing Military Disparity, Japan, Multilateral Organizations, Europe's
social model, Turkey, EU/USA Market Place."=20

Hopefully, journalists are beginning to wake up, at long last, to the idea
that Bilderberg is real and that it is a very important influence in the
world.  Perhaps, the veil of secrecy can be lifted if only a little and
with that hope, Alistair McConnachie set out to find participants who
might be willing to say something about what was going on inside the
hotel.=20

Hotel staff coming and going would just look at their feet without
uttering a world.  A reporter for the Scottish Daily Mail who knocked on
the doors of the staff accommodation block was arrested, handcuffed and
detained for eight hours in Ayr Police Station under Section 14 of the
Criminal Justice Act (Scotland), which is invoked when police have reason
to suspect an offense has been committed! This episode is reported in The
Press Gazette of 22 May.=20

However, for a few hours on Saturday, between 12 noon and 3pm, the
delegates spent time in the grounds, either playing tennis, playing golf
on the course by the sea, or visiting Culzean Castle a little up the
coast. Alistair McConnachie and a colleague had time to speak to delegates
as they passed.=20

Otto Wolff von Amerongen, Chairman and CEO of Otto Wolff GmbH in Germany
was the first to stop and explained that the meeting was structured with
short introductions to a chosen topic and then a general discussion. Two
British delegates explained that there is a panel which consists of a
moderator and two or there people.  They have about 10 minutes each on the
chosen topic and then there is "discussion questions, which last for 5, 3
or 2 minutes."  There are no introductory documents, and there are no
records. At the most there is a page on a 3 hour debate.  It doesn't
circulate documents between its members.  One of the British delegates
explained that it was not possible to mount a conspiracy in a group like
the Bilderbergers because it has no existence between its meetings. George
Papandreou, Alternate Minister for Foreign Affairs was out jogging and
came over to speak.  He said they had been discussing, "Everything.
Everything from the Asian crisis to Portugal to whatever else." He was
happy to have his photo taken, "You want to put me in the paper like this?=
=20
They'll love it in Greece." He jogged off, urging, "Be strongly critical,
whatever you write!"=20

A little light is beginning to shine on this group.  For example, Will
Hutton, Editor of The Observer, who was an attendee at the 13-15 June 1997
Bilderberg Conference at Lake Lanier Islands outside Atlanta, Georgia
wrote on 1st February 1998 ("Kinder capitalists in Armani specs") that
"the Bilderberg Conference ... us one of the key meeting of the year ...
the consensus established here is the back-drop against which policy is
made worldwide".=20

A recent former delegate who "holds a senior position in the media"
(almost certainly Hutton - SCS) was quoted anonymously at length by
Malcolm Macalister Hall in the Mail on Sunday article of June 14, 1998.
Macalister Hall writes:  "But he says that Bilderberg is part of a global
conversation that takes place each year at a string of conferences, and it
does form the backdrop to policies that emerge later, 'There's the World
Economic Forum at Davos in February, the Bilderberg and G8 meetings in
April/May, and the IMF/World Bank annual conference in September.  A kind
of international consensus emerges and is carried over from one meeting to
the next. But no one's really leading it. This consensus becomes the
background for G8 economic communiqu=E9s; it becomes what informs the IMF
when it imposes an adjustment programme on Indonesia; and it becomes what
the president proposes to Congress."=20

The Bilderberg Group is one of a constellation of "private groups" with
related global agendas.  They include the Trilateral Commission, the
Council on Foreign Relations and the Royal Institute for International
Affairs (Chatham House).  Arnold Toynbee, the central figure at Chatham
House for thirty years from 1925 to his retirement in 1955 might have been
speaking about the ethos of any one of these groups when he commented that
they were "denying with our lips what we are doing with our hands"
(International Affairs, Vol. 10).=20

The Social Credit Secretariat is keen to contribute what it can to
ensuring that the agendas of such organisations are made fully open to
democratic scrutiny and that especially our elected politicians cease
attending such group meetings for so long as they are subject to any
instruction to secrecy.  Finally, we put the following comment on record,
passed to us, from one of the many people we spoke to and who shall remain
nameless, "Book your holidays in Portugal next year."=20

Any readers who want a copy of the full list of delegates, or a copy of
the original article, are invited to write, enclosing a s.a.e. to The
Social Credit Secretariat, 16 Forth Street, Edinburgh, Scotland, Great
Britain, EH1 3LH. Telephone 0131 550 3769, e-mail social.credit@virgin.net
Also see the Internet site at www.scss.gil.com.au

-- Tony Gosling tony@gaia.org Kebele Caf=E9 Tel 0117 939 3093/939 9469 14
Robertson Road, Eastville, Bristol, BS5 6JY.=20

The Land Is Ours - A Landrights Movement for Britain
office@tlio.demon.co.uk http://www.oneworld.org/tlio/ email us your UK
address and tel. no to get our free newsletter Box E, 111 Magdalen Road
OXFORD OX4 1RQ England Tel. +44 (0)1865 722016

"And that not only this Common, or Heath should be taken in and Manured by
the People, but all the Commons and waste Ground in England, and in the
whole World, shall be taken in by the People in righteousness, not owning
any Propriety; but taking the Earth to be a Common Treasury, as it was
first made for all."  1649 Winstanley the Digger on the web:=20
http://www.tlio.demon.co.uk/diggers.htm


------- Forwarded Message Follows ------- Date:  Thu, 13 Aug 1998 17:35:45
-0400 (EDT)  From:  Mike Dolan <mdolan@citizen.org> Subject:  ICTSD and
WTO Transparency To:  Multiple recipients of list TW-LIST
<tw-list@essential.org> Reply-to:  mdolan@citizen.org

Friends:=20

By way of Preview of Coming Attractions (in anticipation of the WTO 1999
Ministerial here in the USA) ...=20

A colleague from Geneva has requested that we post hereto the following
discussion of WTO transparency, prepared by the International Centre for
Trade and Sustainable Development=FF (ICTSD or the Centre) which was
established in Geneva in September 1996 to contribute to a better
understanding of development and environment concerns in the context of
international trade.  We have enjoyed their web-site and we recommend it
-- http://www.ictsd.org
***********************************************************************
IMPROVING THE TRANSPARENCY OF WTO OPERATIONS

Communication from the European Communities

The following communication has been received on 13 July 1998 from the
delegation of the European Communities with the request that it be
circulated to WTO Members

The EU strongly supports the statement in the May Ministerial Declaration,
in which WTO Members "recognised the importance of enhancing public
understanding of the benefits of the multilateral trading system in order
to build support for it and agree to work towards this end.  In this
context we will consider how to improve the transparency of WTO
operations."  Greater transparency is essential to reinforce the WTO as an
institution and strengthen support for the multilateral trading system.
This issue requires therefore priority attention by all WTO Members

Transparency essentially implies a policy of open access to information as
regards WTO activities.  Transparency is therefore an essential component
of accountability and a necessary prerequisite for a meaningful process of
consultations with organisation of civil society.  Consultations is of
course a broader concept, which includes the process through which
organisations of civil society can engage in dialogue with WTO Members on
issues of mutual interest.  The main focus of this submission are
immediate steps that could be taken to enhance transparency in the sense
of access to information, although the submission also stresses the
importance of making full use of current avenues for consultation and
cooperation with organisations of civil society.  The Community is also
suggesting that the General Council should undertake a review of the
adequacy of current means of interaction with NGO's in order to enhance
the opportunities for consultation and cooperation with organisations of
civil society.  The Community will be presenting further ideas on how to
enhance interaction with organisations of civil society in a future
Communication to the General Council.=20


1. The need to improve transparency of WTO operations

Since the entry into force of the WTO, steps have been taken to improve
the transparency of WTO operations.  The General Council adopted on 18
July 1996 decisions on "Procedures for the Circulation and Derestriction
of WTO Documents" and on "Guidelines for arrangements on relations with
non-governmental organisations".  On the basis of such decisions a number
of steps have already been taken to improve the transparency of WTO
operations:=20

        - A large number of WTO documents are now available to the public
and access to such documents has been greatly facilitated through the
establishment of the WTO Internet home page.=20

        - Panel reports are generally unrestricted at the same time in
which they are circulated to all WTO Members,

        - The Secretariat has developed channels of communication with a
large number of NGOs representing different interests in civil society.=20
Of particular interest, as a means of fostering an interactive dialogue
between WTO Members and the broad NGO community, has been the organisation
of symposia on issues such as trade and the environment or trade
facilitation.  Their informal nature is particularly conducive to an open
dialogue in which the particular interests and concerns of the broad NGO
community can be communicated and discussed with WTO Members.  Such open
dialogue contributes not only to a better understanding of the role and
activities of the WTO, but also enriches and strengthens the WTO by
providing a means to draw on the expertise of organisations of civil
society.=20

While all these steps are important, there is a clear need for further
improving the transparency of WTO operations.  Trade policy has a major
impact on the livelihood and welfare of citizens.  It is therefore only
natural that WTO activities are a matter of legitimate public interest and
debate.  A deficit of information about WTO activities can only result in
public mistrust and misunderstandings and weaken support for the
multilateral trading system.  The authority of the WTO as an institution
would be strengthened, and public support for multilateral trade
liberalisation enhanced, if the WTO were to follow a much broader policy
of openness in access to information and if greater use were to be made of
current avenues for interaction with organisations of civil society.
Transparency should be part of a wider communication strategy to convey
the benefits of an open multilateral trading system, explain the
functioning and the role of the WTO, as well as the interactions between
trade policy and broader concerns in a global economy.=20

There is no reason why it should not be possible to adopt, such a policy
of greater openness without impinging on the nature of the WTO as an
intergovernmental forum.  The WTO is a member-driven organisation whose
core functions are to provide a forum for negotiations among WTO
Members,monitoring compliance with treaty obligations and providing a
mechanism for the settlement of disputes.  All such functions are
essentially intergovernmental in nature.  Governments are supposed to
represent their entire population.  They have the primary responsibility
to establish, at the domestic level, broad consultative processes with
organisations of civil society, through which such organisations can have
an input into the process of trade policy formulation, and to develop an
effective communications strategy.=20

At the same time, it should be pointed out that the WTO has a broader
political remit than the GATT.  This is reflected in the establishment of
the Ministerial Conference, the new function of undertaking reviews of the
trade policies of WTO Members and the mandate on "coherence in global
economic policy-making".  Further reflection is needed on how this broader
policy-oriented role of the WTO could be better performed by its Members.
For instance, two areas that may require further attention are the
following: a) The General Council proceedings could include in between
Ministerial Conferences, consideration of the coherence between WTO
activities and broader trends and concerns in the global economy.  This
would allow the WTO to remain fully sensitive to its broader environment
and contribute towards the fulfillment of its mandate on coherence in
global economic policy-making including cooperation with the Bretton Woods
institutions, b) The WTO should become a more powerful tool for
transparency, and it must make full use of the opportunities provided by
current proceedings, not least the TPRM, for Members to explain the full
range of their trade related practices and policies in areas of concern to
their partners.  Improvements in each of these two areas require further
common reflection since these goals must not be pursued at the expense of
the negotiating effectiveness of the organisation.=20

The Community considers that the time has come for the WTO to take further
decisive steps to enhance the transparency of its operations. The
political mandate given by Ministers should be acted upon as a matter of
urgency. In particular, we would propose immediate steps to ensure that:
a) WTO documents are immediately derestricted and made accessible to the
public; b) documents pertaining to dispute settlement are, as a general
rule, treated as unrestricted and delays in the circulation and
derestriction of panel reports are substantially shortened, c) greater and
more systematic use is made of the current avenues for interaction with
organisations of civil society.=20

The Community would wish to underline the importance of rapidly delivering
results. This should not be a matter of controversy among WTO Members,' it
should therefore be possible to reach rapidly a consensus on a set of
reforms which are both realistic and ambitious, thereby enhancing the
authority of the WTO as an organisation, The General Council has a mandate
to review the procedures for the circulation and derestriction of WTO
documents by July of this year. A decision to substantially enlarge the
current policy of access to documents could therefore be a first immediate
response to the mandate given by Ministers. In order to facilitate
discussion and Consensus-building, a specific proposal is attached to this
Communication.  Some of the steps required to enhance transparency in
dispute-settlement proceedings require a change of the Dispute Settlement
Understanding. The review of the DSU therefore provides an opportunity,
which should not be missed, to reach rapid results on this crucial aspect
of transparency. Finally, as regards consultations and co-operation with
NGOs, the Secretariat has already been given a mandate to facilitate such
a dialogue through a number of informal mechanisms. The General Council
should fully support ongoing efforts by the Director General to improve
contacts with the NGO community. It should also review the adequacy of
current means of interaction with NGOs in order to enhance the
opportunities for consultation and cooperation with organisations of civil
society.=20

2.  Procedures for the Circulation and Derestriction of WTO Documents

The Guidelines adopted by the General Council in July 1996 are already
based on the principle that WTO documents shall be circulated as
unrestricted. This principle is, however1 subject to exceptions specified
in an Appendix to the Decision (WT/L/160/Rev1). The procedures applying to
such document generally imply consideration for derestriction six months
after the date of circulation of the document. Unless a Member objects,
documents are derestricted after a certain time limit -normally sixty days
- since the circulation by the Secretariat of a list of documents eligible
for consideration for derestriction. Any Member may also present a request
for the earlier derestriction of a document, which would then be
derestricted within 60 days unless a Member objects.=20

The current procedures represented a significant improvement in relation
to prior GATT practices by providing for the earlier derestriction of WTO
documents, The procedures have shown, however, a number of weaknesses and
fall short of what can be expected in terms of transparency of WTO
operations.  Timely information to the public is crucial for the proper
understanding of WTO activities.  Very few WTO documents can be considered
to contain genuinely confidential information, which would justify
restriction. The current procedures moreover have a number of flaws:=20

a)  The delays for the derestriction of most WTO documents seriously
limits their value for public information. Apart from traditional
practice, there appears to be no rationale for a rule that makes most
documents available to the public, but only after the expiry of an
artificial deadline. The restricted nature of many WTO documents not only
unnecessarily limits public access to information, but also makes it more
difficult for WTO Members to properly explain to domestic constituencies
activities in the WTO.=20

b)  Requests for early derestriction can result in a selective and partial
release of information and may provoke unnecessary controversy among WTO
Members. A general rule under which most types of WTO documents would be
immediately derestricted would avoid the risk of selectivity and ensure an
adequate and full reflection of WTO activities,



c)  A WTO member may indefinitely block derestriction of a WTO document.=20

The Community considers, therefore, that there are clear benefits in
adopting a much broader policy for the immediate derestriction of most WTO
documents.  Access, through the WTO Internet Home Page, to most current
WTO documents would be a major and easy-to-achieve step in improving
transparency. Such step is all the more necessary since WTO
intergovernmental meetings remain, in principle, closed to the public. In
particular, and subject to very limited exceptions, all submission by WTO
Members, Secretariat background notes, minutes of meetings and agendas
should be circulated as unrestricted documents. The details of the EC
proposal are outlined in the annex to this submission.=20


3.  Transparency in WTO Dispute-Settlement

The 1996 Decision on Derestriction only deals partially with the public
availability of documents presented in the context of WTO dispute
settlement.  The Decision does not apply to submissions to a dispute
settlement panel, which are governed by the relevant provisions of the
DSU. Panel reports are circulated as unrestricted, unless a party to the
dispute requests delayed derestriction, which may not exceed ten days
since the date of circulation.  This provision is subject to review within
the context of the review of the DSU.=20

The review of the DSU provides an opportunity, which should not be missed,
to improve the transparency of the WTO dispute-settlement process. The
Community will present a number of proposals to improve transparency in
dispute settlement. Consideration of these proposals should take place
within the context of the DSU review, rather than in the General Council
review on transparency.=20


4.  Consultation and Co-operation with Organisations of Civil Society

On the basis of Article V.2 of the WTO Agreement, the Council established
on 18 July 1996, "Guidelines for arrangements on relations with
non-governmental organisations". Such guidelines call upon the Secretariat
to "play a more active role in its direct contacts with NGOs"; recommend
the development of a number of modalities for interaction with NGOs, such
as symposia on specific WTO-related issues) and envisage the possibility
of participation by the chairpersons of WTO Councils and Committees in
discussions or meetings with NGOs.=20

The Community is convinced that organisations of civil society are key
stakeholders in the domestic process of trade policy formulation. WTO
Members have a primary responsibility to develop, at the domestic level,
procedures for consultation and co-operation through which organisation of
civil society can have an impact on trade-policy making. This should
involve all organisations of civil society with an interest in trade
policy, such as representatives of the business, community, trade unions,
consumer groups, environment or development NGOs. Such dialogue could and
should encompass an increasing number of areas of WTO activities which are
of mutual interest for all stakeholders and WTO Members. At the same time
the WTO, as an organisation, should contribute to greater openness through
a comprehensive policy of access to information.  Greater and more
systematic use of opportunities for dialogue and consultations with
organisations of civil society at the multilateral level should complement
the dialogue undertaken at the domestic political level. The guidelines
adopted by the General Council in July 1996 entrust the Secretariat with
the organisation of the particular modalities for interaction with NGOs,
They could and should be used more fully to further such a dialogue and
consultations. The Secretariat should also consider means of resolving
practical problems that may have arisen in the application of the
guidelines, such as the requirement for NGOs to undertake a separate
registration every time symposia or other means of interaction are
organised.=20

The General Council should therefore: a) Fully support ongoing efforts by
the Director General to improve communication to and contacts with
organisations of civil society; b) Review the adequacy of current means of
interaction with NGOs in order to enhance the opportunities for
consultation and co-operation with organisations of civil society,
including through the organisation of symposia and other informal means of
dialogue with NGOs on relevant WTO-related issues.  The Committee on Trade
and Environment has provided a good model in this respect. It should be
stressed that WTO Members have direct responsibility to consult all
interested stakeholders in the development of their trade policies.  The
General Council could, in the run up to the 1999 Ministerial, provide a
forum for an exchange of views and experiences among WTO Members on the
wider issue of developing an effective communications strategy with
interested stakeholders. The Community will further present ideas on these
issues in a future submission to the General Council.=20

-----------------------

ANNEX Proposal for Revision of the Procedures for the Circulation and
Derestriction of Documents.=20


The Decision adopted by the General Council on 18 July 1996 is already
based on the principle that WTO documents shall be circulated as
unrestricted.  Exceptions are set out in an appendix which lists certain
categories of WTO documents for which derestriction is subject to special
procedures.=20

On the basis of experience, and the call by Ministers to consider means of
improving transparency in WTO operations, it is proposed that certain
types of WTO documents be removed from the exception list and be therefore
circulated as unrestricted documents.  As a general principle, procedures
for delayed derestriction should only apply to those particular WTO
activities where there is a strong case for maintaining a period of
confidentiality, while an issue is subject to consideration by WTO bodies.
In particular, it is proposed that the following types of documents be
removed from the exception list:=20

a)  Documents Submitted for Circulation by a WTO Member:  All such
documents should be circulated as unrestricted, including those which are
currently classified as working documents On an exceptional basis, a
Member may indicate to the Secretariat that a document be circulated on a
restricted basis, In such case, however, the document should be
automatically derestricted after the expiry of a period of time (e.g. 6
months).=20

b)  Secretariat Background Notes: Such notes are intended to provide
factual information and not to represent the collective views of WTO
Members.  All such notes should therefore be circulated on a
non-restricted basis. There may be exceptional cases in which a WTO body,
when requesting the Secretariat to prepare a background note, considers it
essential that the note be initially considered On a confidential basis.
This may be allowed, as an exception to the general rule of derestriction,
provided that a maximum time period (e.g. 6 months) is established for its
automatic derestriction.=20

c)  Minutes of Meetings: Minutes are prepared under the responsibility of
the Secretariat and provide essential information about WTO activities.
Minutes should therefore be circulated on an unrestricted basis. As noted
below, exceptions would be made for a limited number of WTO bodies which,
by their very nature, require a certain degree of confidentiality in
proceedings.=20

d)  Meeting Agendas: These should be immediately derestricted.=20

The proposals for immediate derestriction above would not affect certain
categories of documents, for which current procedures would continue to
apply.  This is the case for:=20

- Working documents of a draft nature, such as decisions and proposals.=20
(Consideration could be given to procedures to facilitate earlier
derestriction of such documents after die expiry of a reasonable period of
time;=20

- Documents in the Secret/series (i.e. documents relating to Article
XXVIII negotiations, including processes initiated pursuant to Article
XXIV:6);=20

- Documents relating to Working Parties on Accession (Documents submitted
by the acceding country could be subject to earlier derestriction if the
acceding country so indicates to the Secretariat);=20

- Documents relating to Balance-of-Payments consultations;=20

- Documents relating to the Budget Committee.=20

Documents relating to the Trade Policy Review Mechanisms would also
continue to be subject to current procedure, which already provide for
derestriction upon the expiry of the press embargo thereon.=20

Panel reports should be immediately derestricted upon their circulation to
all WTO Members.  Other aspects relating to transparency in WTO dispute
settlement should be considered within the framework of the DSU review.=20

It should be noted that procedures for derestriction only apply to
official WTO documents.  The procedures do not apply either to the
Plurilateral Trade Agreements, although the Community would favour their
adoption by the competent bodies.=20

~~~~~~~~~~~~~~~~~~~~~~~~ Miguel Jimenez-Pont Dialogues Programme Director
International Centre for Trade and Sustainable Development 13, chemin des
Anemones; CH-1219 Geneve; (Switzerland)  Tel: (41-22) 979-9492 Fax:
(41-22) 979-9093 E-mail: ictsd2@unep.ch Please, feel free to visit our WEB
Site: http://www.ictsd.org

---------

Date: Mon, 3 Aug 1998 09:56:06 -0700
From: David Bacon <dbacon@igc.apc.org>
Subject: article for will swaim

FREE TRADE'S REVENGE
By David Bacon

        IRVINE, CA (8/2/98) -- Daimler St. extends for three unimpressive
blocks, between anonymous crackerbox buildings in an aging Irvine
industrial park, next to Interstate 55.  It's hard to tell what goes on in
these concrete warehouses - they look pretty much alike.  In some of them,
it's apparent that nothing goes on at all -- real estate signs hang across
their facades, advertising that their occupants have fled or disappeared.
The Friction plant is one of these anonymous tiltups.  Soon it will be
vacant too -- already a real estate agent's sign partially hides the arrow
telling truck drivers where to turn to find the loading docks. Friction is
so anonymous that no other sign even announces the company's name.  If you
don't know the address already, presumably you have no business there.=20
        Friction Corp. gets its name from the simple, automatic process
every driver uses a hundred times a day, every time they press downward on
the brake pedal of a car or truck.  As the brake pad squeezes the rotor or
pushes out against the brake drum, friction from the contact brings their
vehicle safely to a halt. Friction makes brakes. Inside its concrete box,
the company's workers bake the pads.  They drill the holes and attach them
to the metal flanges, which later bolt into the wheel assemblies of a
million cars and trucks.  For over a hundred people, Friction has been a
familiar place for years -- even decades. Since working life absorbs a
third of all waking and sleeping hours, these folks have spent as much
time in this long low edifice as they have in their own kitchen or living
room.=20
        Maria Villela and her husband Raquel spent a combined 32 years in
this Irvine auto parts plant.  They were there when the business was
bought by Echlin, a Connecticut-based transnational corporation.  The two
were leaders in the organizing drive that brought in the union in 1994,
and Maria became its president.  And they were there last summer, when
three workers from another Echlin plant, three thousand miles away, showed
up at lunchtime on the grassy strip between the factory and the street.=20
        When the lunchtruck pulled into the lot that day, sounding its
horn, Friction workers began streaming out of the plant's huge doors into
the parking lot.  A small group took their lunches, walked out of the gate
to the street, and sat down on the grass to hear what the three strangers
had to say.=20
        Like the majority of Friction's workers, who are immigrants from
Mexico, Guatemala, and El Salvador, the strangers spoke Spanish.  They
told the tale of their own factory, a plant in Mexico City with a history
of accidents, where wages are a tenth of those in Irvine, and where a
government-controlled union prevented workers from acting independently to
improve conditions.=20
        Their story was not a complete surprise to Friction workers. "We
used to get boxes of parts from their plant," explains union shop steward
Ruben Cabrera.  "When we'd open them up, the parts were covered in dust."
Brake pads are made from asbestos.  Friction workers thought the dust in
the boxes was that fibrous mineral which causes mesothelioma, a kind of
lung cancer, when it's inhaled.  Dust in the boxes, they say, already gave
them the idea that conditions in the Mexico City plant were not healthy.=20
        Nevertheless, "we were surprised by what they said, and some of us
got pretty mad," Cabrera remembers.  "The situation they described was
very unjust -- I felt they were being treated like slaves." As the quiet
lunchtime discussion wore on, Friction workers described to their Mexican
visitors the improvements they'd been able to make in Irvine after
organizing their union.  The Mexicans, on their part, explained that they
were starting an effort to organize their own independent union, and get
rid of the government-affiliated union the company favored.=20
        Many Friction workers, who as Mexican immigrants were already
familiar with the country's system of "charro" or management-friendly
unions, identified with the effort in Mexico City to win a democratic
union. "We wanted to help the workers there win their rights," says Maria
Villela.=20

        In February, Echlin Corp. formally notified Villela's union it was
closing the Friction plant.  By August 31, the gate into the Irvine
factory will shut for the last time. The ovens will be turned off.  The
machinery that churned out brake pads and auto parts for over two decades
will be loaded onto trucks and hauled away. The plant's 110 production
workers will give the boxy building a last look, and move on with their
lives.=20

Friction will be gone.=20

        Echlin spokesperson Paul Ryder says only that the work is being
moved, and claims it's only going to other U.S. factories. "We have
overcapacity for that product line," he says.  "The closure is just the
normal course of business."=20
        But Friction workers are convinced that their desire for a common,
human bond of sympathy and support for their lunchtime visitors is the
reason why Echlin is shutting Friction's doors.  Friction managers, they
say, interpreted their desire as a danger signal. The move came as a shock
to Friction workers, who have an average of 11 years on the job.  "We
think it's revenge," Villela declares. "We work like crazy here, and make
the best product in the industry.  Now they say they're transferring the
work to other plants."  According to Cabrera, a couple of years ago Sears
Roebuck, one of Friction's principal customers, was so pleased with the
quality of the factory's product that it gave the company money to reward
its employees. Each worker took home a $100 bonus.
        At lunchtime last week, a group of workers eating on the small
grassy strip next to the street speculated that the company would actually
sacrifice quality and efficiency by transferring the work to other plants.=
=20
"We hear that in Virginia" one reported, "where some of the work's going,
that they have eight people working on each oven.  Here we only need two."=
=20
        It seems evident that economic motives are not the only ones
driving the plant's closure. According Leanna Noble, a representative for
the United Electrical Workers (UE), the parent union for the local at the
Friction plant, "the company also told us that the closure reflected a
change in corporate management, that it was an effort to reorganize the
production mix and the location of production. It's clear that the company
isn't cutting production back - it's moving it."=20
        "I think it's likely that the company found out about the Mexico
City workers' visit to Irvine, and concluded that the Irvine workers had a
special role in encouraging the organization of their independent union,"
speculates Bob Kingsley, the UE's organizing director.=20
        That conclusion is supported by conversations with supervisors
that workers reported to Cabrera.  "They were told that 'this is what you
get for what you've done,'" he says.  "What hurts isn't just the shock of
losing a job.  It's losing friends and people you've known and worked with
for years.  I came here from a small town in Michoacan seventeen years
ago. I got a job here right away, and I've been here ever since.  Working
at Friction has been a big part of my life."=20

        Encouraging workers from the Mexico City plant to organize an
independent union was not the first time that the employees of the Irvine
factory found themselves mired in serious conflict with the company.=20
        Echlin has a reputation as an extremely union-hostile employer. On
March 13, 1998, Echlin senior vice-president Milton Makoski made perfectly
clear the company's raging antipathy to unions.  In a letter to Teamster
Union vice president Tom Gilmartin, who proposed that Echlin negotiate a
corporate code of conduct, Makoski wrote, "We are opposed to union
organization of our current non-union locations ... We will fight every
effort to unionize Echlin employees who have chosen not to be represented
by a union."  He went on to note approvingly that, despite "60 years of
determined and relentless efforts"  by unions, a majority of its employees
are still unorganized.  "There is only one [operation] in existence," he
regrets, "where the employees, while they were part of the Echlin
organization, have elected to be represented by a union." (The company's
other unionized plants were already union at the time that Echlin bought
the companies.)=20
        That operation was the Friction plant. In the Irvine factory,
workers had formed their union, UE Local 1090, in a fierce organizing
battle in 1994.  "We got tired of having supervisors tell us, 'do this or
there's the door,'"  Cabrera recalls.  "If we stopped our machine just to
go to the bathroom, they'd yell at us.  Even those of us who had been here
for years were only making $6.00 an hour."=20
        Cabrera is a heavyset, softspoken man.  It's not hard to see why
he might inspire confidence in other workers trying to speak up to a
hostile management, or why they might later have chosen him as steward.=20
As he desribes these conditions there's no whine in his voice.  He speaks
carefully and slowly.  It's a demeanor that would carry credibility even
with the foremen themselves. But had union depend simply on the
credibility of leaders like Cabrera, or the bravery of the other workers
inside the plant, it still might not have succeeded in overcoming the
company's intense opposition. The union tried to back them up by finding
support for them from other factories in the Echlin chain.=20
        "We put one of our organizers on the road," Kingsley explains,
"meeting with workers and unions at other Echlin plants.  Workers in one
Virginia factory where the Amalgmated Clothing Workers (now UNITE) had a
contract, and at various Teamster locals around the country signed
petitions, sent letters of support, and wore buttons at work supporting
the local in Irvine.  That was the origin of what grew to be the Echlin
Workers Alliance."=20
        The effort was successful.  Echlin signed a contract and
recognized the union in the Friction plant.  Two years later, during a
second round of contract negotiations, unions in the Echlin alliance again
sent faxes and petitions to plant managers throughout the company in
support of the Irvine workers. Villela, who was elected president of the
Local 1090, credited the alliance's involvement with helping them win a
sizable raise.=20
        Given the company's stated attitude towards unions, these actions
may have won the company's respect, but not its goodwill.  Nevertheless,
the union organizing alone was probably not sufficient to provoke the
closure of the Friction plant. The series of events which set that into
motion may have had their start instead on the outskirts of Mexico City,
at Echlin's ITAPSA brake factory.  There, throughout 1996 and 1997,
workers at the ITAPSA plant endeavored to join STIMAHCS, an independent
metal- and steelworkers union. That effort was thwarted last summer
through the combined efforts of the company, the government-backed
"official" union federation and the local police. While squelching
independent unions in Mexico is nothing out of the ordinary, the
international response to it broke new ground.  Since '96, STIMAHCS has
been part of a NAFTA-zone alliance of unions with contracts in Echlin's
factories, including the Teamsters, the United Electrical Workers (UE),
the Paperworkers and UNITE in the U.S., and the Canadian Steelworkers and
Auto Workers.  This unique labor alliance sought to mobilize the unions'
combined membership at Echlin factories to assist each other in bargaining
and organizing.  "Our primary purpose," says Kingsley, "is to achieve a
situation where we're all sitting down at the table with the same company,
and bargaining together."=20
        When ITAPSA workers began facing firings in June of 1996, unions
in the alliance responded.  The most active U.S. local in that campaign
was the one at the Irvine Friction plant. Local 1090 members signed a
petition after the September 10 sham-election at ITAPSA, demanding that
Echlin stop firing workers and recognize STIMAHCS.  When Villela and other
executive board members presented it to Friction plant manager Mark Levy,
"we could see in his face how angry he was.  He told us we had drawn a
line between the union and the company," she recalls.=20
        The battles around both Friction and ITAPSA show a new level of
union resolve to reach across borders in an effort to deal with a common
employer in the era of free trade - even as they underscore the
difficulties of prevailing in such efforts. As the U.S. auto industry
relies increasingly on parts made in maquiladoras and other Mexican
plants, however, the increased U.S. focus on struggles such at those at
ITAPSA may just be beginning.=20

        NAFTA had only been in effect for a few months when Ruben Ruiz got
a job at ITAPSA in the summer of 1994.  As his new boss showed him around,
Ruiz noticed with apprehension that the machines were old and
poorly-maintained.  He had hardly begun his first shift when workers
around him began yelling out as a machine suddenly malfunctioned, cutting
four fingers from the hand of the man operating it.=20
        "I was very scared," he later remembered.  "I wanted to leave."
But he needed a job. Accidents were only part of the problem. Asbestos
dust from the brake parts manufactured at the plant coated machines and
people alike. Workers were given X-rays, Ruiz says, and later some would
be fired.=20
        Echlin says its ITAPSA plant complies with Mexican health and
safety laws.  "Medical records indicate that since Echlin has owned the
ITAPSA plant there have been no work-related employee deaths," a company
statement says.=20
        It seemed obvious to Ruiz, however, that things were very wrong.
When his friend David Gonzalez asked him to come to a meeting to talk
about organizing an independent union, he went. As workers at ITAPSA
organized, they discovered that the plant already had a union -- Section
15 of the Confederation of Mexican Workers, Mexico's argest labor
federation.  But ITAPSA's 300 employees had never even seen the union
contract.=20
        The CTM agreement with Echlin is a "protection contract,"
insulating the company from labor unrest.  Jesus Campos Linas, the dean of
Mexican labor lawyers, says there are thousands of such contracts,
arrangements of mutual convenience between government-affiliated unions
such as the CTM, and foreign companies who want to take advantage of
Mexico's low wages. In the process of making their decision to challenge
the protection union system in their factory, three ITAPSA workers visited
their Irvine counterparts to find out about conditions in U.S. plants.=20
        Once ITAPSA managers knew about the independent union, the firings
began.  In early June, 1996, 16 workers were terminated.  Ruiz was called i=
nto
the office of Luis Espinoza de los Monteros, ITAPSA's human relations
director.  "He told me he had received a phone call from the leaders of the
Echlin group in the U.S., who told him that any worker organizing a new uni=
on
should be discharged without further question," Ruiz recounts.  "He told me=
 my
name was on a list of those people, and I was discharged right there and th=
en."

        Despite the firings, the independent union chosen by ITAPSA workers=
,
STIMAHCS, filed a petition with the regional office of Mexico's labor board=
=2E  A
date was set for an election between STIMAHCS and the CTM -- August 28, 199=
7.
        That morning, the fired workers went to the plant, where they were
joined by union supporters from the swing and grave shifts, anxious to
vote.  But the day before, at the CTM's insistence, the labor board had
postponed the election without notifying STIMAHCS.  Company supervisors,
looking at the off-shift workers assembled at the gate, got a very good
idea of who was supporting the independent union. "That afternoon the
company began to fire more workers," says Benedicto Martinez, general
secretary of FAT, a Mexican federation of independent unions.  He says
that 50 workers were eventually terminated - a claim Echlin disputes.
"Allegations of retaliation and dismissal of 50 employees as a result of
their allegiance to FAT are false," it says.=20
        The election was finally held 13 days later.  The evening before,
a member of the state judicial police drove a car filled with rifles into
the plant, unloading them openly.  The next morning, two busloads of
strangers entered the factory, armed with clubs and copper rods.  STIMAHCS
tried to get the election canceled.  But the labor board went ahead, even
after thugs roughed up one of the independent union's organizers.=20
        As workers came to vote, escorted by CTM functionaries, they
passed a gauntlet of the club-wielding strangers.  At the voting table,
they were asked to state aloud which union they favored, in front of
management and CTM representatives.  STIMAHCS observers couldn't even
inspect the credentials of the voters.  Many voted who were unknown to the
factory's workers.=20
        Predictably, STIMAHCS lost.=20
        "The UE had a staff organizer present during the [ITAPSA]
election, Sam Smucker, who was on leave in Mexico at the time," Kingsley
notes. "Together with the way in which the Alliance was formed, and its
origins, this all made the UE a target.  That's why we believe the closure
of the plant in Irvine is an act of vengeance and retaliation." Echlin's
Paul Ryder wouldn't respond to the allegation that theclosure is revenge
for workers' solidarity actions.=20
        After the Mexico City election, the trinational alliance of unions
filed a complaint over the violation of workers' rights at Echlin, before
the administrative body set up to enforce the North American Agreement on
Labor Cooperation. This treaty, commonly known as NAFTA's labor
side-agreement, allows workers, unions, and other organizations to charge
that either Mexico, Canada or the U.S. is failing to enforce its laws
guaranteeing workers' rights.=20

        The Echlin case alleges collusion by the Mexican government, the
company and the CTM to deny workers the right to representation by an
independent union.  The charges were heard before Irasema Garza, secretary
of the National Administrative Office, a division of the U.S. Department
of Labor, in Washington on March 23. A number of ITAPSA workers submitted
affidavits about the firings and intimidationof workers.  Ruiz himself
testified.=20
        And - just days after being told her own Friction plant was
closing -- Maria Villela also went to Washington to support the ITAPSA
workers at the NAO hearing, "We don't regret what we did for a minute,"
she says. "The company is responsible for a great injustice." Echlin never
showed up to contest the testimony. The NAO has not yet reported its
conclusions.=20

        In hundreds of small factories scattered across the California
southland, job security is evaporating as it did at Friction.  They've
become cogs within large corporations seeking to cut labor costs to the
bone, whipsawing workers and shifting production from plant to plant,
country to country, as though borders and distance have vanished.=20
        For years, workers have agonized over the resulting devastation to
lives and communities.  In Irvine, Friction workers moved beyond
complaining to action.  Villela and her union argue that the closure
provides telling evidence that agreements like NAFTA have undermined their
jobs.=20
        To date, however, NAFTA's side agreement has been largely
ineffective in protecting them, or other workers who have tried similar
efforts. The problem workers face at Mexican plants like ITAPSA is not a
lack of laws to protect them.  Mexican labor law is "very advanced and
progressive," according to STIMAHCS attorney Eduardo Diaz.  "The Federal
Labor Law and Article 123 of the Constitution [cover] fundamental social
rights," he points out.=20
        But Mexican economic development policy depends on encouraging
foreign investment.  "Low wages are part of that policy, and every
maquiladora that opens its doors is born with a union that protects it,"
says STIMAHCS general secretary Jorge Robles. U.S. trade policy reinforces
those priorities, using NAFTA and bailout loans to create favorable
conditions for U.S. investment.  Corporations like Echlin reap the
benefits.  According to University of California Professor Harley Shaiken,
"the productivity of workers in Mexican plants is on a par with plants in
the U.S.  Investors get first-world rates of productivity, and a workforce
with a third-world standard of living."=20
        It's not a surprise that NAFTA's labor side agreement has a hard
time overcoming these obstacles.  "We recognize there's not enough power
in the process to overcome the economic incentives of free trade," says
Robin Alexander, the UE's director for international solidarity.  "It's an
extremely weak tool, and the lack of penalties for violating union rights
is a gaping hole."  Nevertheless, the union alliance convinced the
AFL-CIO, the Canadian Labour Congress and a new union federation in
Mexico, the National Union of Workers, to join in a complaint against
Echlin under the side agreement.  It is the first time they've taken such
action together.=20
        "Wherever I look, I see unions making efforts to figure out how to
deal with each other, and face the danger of transnational corporations,"
Alexander observes.  "Maybe there is no single answer, at least not yet.
But we won't find any answers at all without getting out there and looking
for them."=20
        Workers at Irvine's Friction plant were some of the first to do
so.  They may have been forced to sacrifice their jobs, but they see
themselves as pioneers, reaching across international boundaries to find
new ways of enforcing labor rights.=20

--------------------------------------------------------------- david
bacon - labornet email david bacon internet:  dbacon@igc.apc.org 1631
channing way phone:  510.549.0291 berkeley, ca 94703
------------------------------------------------------------


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