Power grab: big business wants to tighten its hold with a new global trade pact.

• Author: Moberg, David
• Position: Multilateral Agreement on Investment

Since 1995, negotiators from the world's twenty-nine richest countries have been meeting regularly in Paris with almost no public scrutiny to draft what the director of the World Trade Organization calls "the constitution of a single global economy." But James Madison wouldn't recognize any kinship between his work and the Multilateral Agreement on Investment (MAI). This new pact would enshrine a planetary regime built around a one-sided bill of rights for corporations and wealthy investors, not the human rights of individual citizens.

You may not have heard about the MAI before. Its beneficiaries prefer it that way. The free-trade establishment--multinational businesses, their law firms, and trade officials of both Republican and Democratic parties--began pushing for deregulation of global investment practices during the lengthy negotiations that led up to the formation of the World Trade Organization in 1995. It was part of a drive to expand the goals of trade negotiations beyond tariff reductions to a broad range of new topics, like protection of intellectual property and deregulation of financial services.

Because there was so much opposition, especially from many developing countries, the United States shifted its strategy. Clinton's trade representative, Charlene Barshefsky, urged negotiation of an investment agreement first among the members of the Organization for Economic Cooperation and Development (OECD), a grouping of the main industrialized nations. Barshefsky believed that these countries were more likely to agree to a radical reduction in controls over global investment. Once they signed on, they could then pressure other countries to come aboard or risk losing foreign investment.

Behind the scenes, big business is pushing for the MAI and helping to draft its language. The U.S. Council for International Business is playing a central role. This fifty-year-old group consists of more than 300 transnational corporations (like American Express, Intel, and Philip Morris) and high-powered global law firms (like Arnold & Porter and Baker & McKenzie). Despite its name, the group includes many corporations that are principally based outside the United States (like Matsushita and Nestle).

The draft text of the MAI--publicly available only because it was leaked to public-interest groups--would give investors a legal status on a par with that of nations. And it would require that almost all of a nation's economy be open to foreign...