The MAI meisters: Up to their old tricks
By Murray Dobbin, Council of Canadians
They're at it again. The bureaucrats who helped bring us the MAI
are beavering away on another chapter in the neo-liberal assault
on government. This time its a multinational Agreement on
Government Procurement (AGP) governing the way that governments
use their purchasing power. While the federal government has long
ago given up using this powerful economic tool to boost the
economy, it is now moving to try to impose a multilateral deal on
the provinces. It would also then apply to municipalities.
Most municipalities use their purchasing power to some extent to
provide growth and stability to their communities - with
preferential purchasing from local firms keeping wages, profits
and taxes in the community. Indeed, it was the threat to this
economic tool that was key to galvanizing opposition to the MAI
among municipalities across the country. The Federation of
Canadian Municipalities ended up taking a very strong stand
against the MAI as did many of the largest cities.
Canada is already a member of the WTO-based Agreement on
Government Procurement, along with 25 other nations, all of them
also members of the OECD. I recently attended a consultation
hosted by the federal government(departments of industry and
foreign affairs)which outlined its "objectives" in pursuing a
broader and more comprehensive agreement.
Those involved in the MAI fight might have expected the federal
Liberals and their officials to be somewhat chastened as a
result. No such luck. The goals of the government are absolutely
unchanged as the language of the background papers to the
consultation revealed.
To be sure, just getting an invitation to the meeting suggests a
small sop to public relations and the inclusion of "civil
society" in the process. But beyond this gesture there is nothing
to suggest that it is anything but full steam ahead. They
couldn't even be bothered to change the title of the
consultation: it was still called the Industry/Government
Roundtable leaving little doubt that anyone else at the table was
simply an observer.
But it was the language of the background papers which revealed
just how blind the trade bureaucrats in Ottawa are to any
interest other than industry. Time after time the document talks
about the goal of the government is to "examine the extent to
which these agreements will benefit Canadian exporters." Ridding
the country of any preferential purchasing practices is the sole
objective. Nowhere is there so much as a hint that the impact on
governments' public policy-making was even thought of let alone
considered.
The negotiations on procurement practices are meant to be
complete by the beginning of the next round of WTO multilateral
negotiations scheduled to take place next fall. There is
resistance in many quarters to a comprehensive agreement but
Canada, if the briefing was any indication, is one of the most
aggressive proponents.
The first goal is "increased [foreign] access to government
procurement markets through limiting of exceptions such as set-
asides to the Agreement on Government Procurement.." Set-asides
is the term used to describe the practice of governments of
setting aside certain contracts for exclusive bidding by local or
national companies.
Canada, following in the tradition of the Free Trade Agreement
with the US, seems prepared to give up everything even if it gets
nothing in return. It acknowledges that there has been "little
progress" on the key issue of market access and points to the
U.S. as a major barrier. "The US exception for Small Business
set-asides is open-ended, unpredictable and well-utilized. There
remains strong US domestic support for this program."
Despite this reluctance on the part of Canada's biggest trading
partner (85% of our trade is with the US), the Canadian
government is charging ahead with schemes to incrementally remove
the ability of our governments to direct their purchasing power
for public policy ends. This involves what the government calls
"de-linking" certain aspects of the agreement which are easier to
accomplish from those, like access, which are more difficult.
There are a number of elements to the procurement practices
regime. One is "simplicity" which the government describes as
making the bidding process "user-friendly." They also talk
about a separate agreement on "transparency" which would oblige
provincial and municipal government to compile extremely detailed
information on all their procurement practices, including the
rationale for local preferences, and file this information with
the WTO. This is the first step in opening up all procurement to
MAI-like procedures and corporate rights. It's just like the
exceptions under the MAI - they provide a hit list of measures to
attack for those wanting to get rid of all local preferences.
Under the transparency agreement, each local government would be
expected to provide "notices of proposed procurement;
notify(deposit copies) with the WTO of procurement policies;
publish notices of contract awards; include evaluation criteria
in bid documents; publish information on reasons for sole source
procurements; dispute resolution provisions for member
countries..."
All of these are significant intrusions into the authority of
local governments and would be onerous financially, especially
for smaller communities. And the only reason for pursuing a
agreement on transparency alone is to make it easier for foreign
corporations to target governments they believe are violating
liberalization principles.
The background document states:
"Canada's market access interests may be best achieved through
achieving a broad scope to open as much foreign government
procurement as possible to transparency obligations. A broad
scope would suggest that Canada pursue a broad cross-section of
federal and sub-central government procurements with limited
exceptions."
In spite of the fact that the anti-MAI campaign highlighted the
draconian dispute settlement process - one of the features which
caused France to withdraw completely - Canada is still pursuing
such a process with resect to procurement. This could see small
municipalities facing huge legal costs to defend their purchasing
practices. Says the background paper: "An issue will be the
extent to which we would wish to promote utilization of the
independent tribunal model and the Canadian International Trade
Tribunal as a single bid challenge mechanism (per NAFTA)..."
The Trade Tribunal was designed with national governments in mind
and to impose such an elaborate and expensive regime on thousands
of small towns and villages indicates just how deeply free trade
ideology has penetrated the thinking of federal government
officials.
Despite the fact that a representative of municipalities attended
the consultative meeting, there was not a single mention in the
background materials of the impact on governments of pursuing a
broader agreement on market access. The assumption that trade is
good regardless of its social and political consequences was
soundly rejected by the opposition to the MAI in a dozen or more
countries. Yet this modern day version of "What's good for
General Motors is good for America" is still the operating
principle of the federal government.
Far from being chastened by the MAI experience, the government is
absolutely committed to those same assumptions. Indeed, it goes
beyond just looking at the benefits for exporters. The federal
government is planning to hire a consultant to complete a
procurement access study. The consultant's instructions include
consultations with a wide variety of firms in each province but
no consultation with municipalities. The consultant is explicitly
instructed to "identify the benefits of market access." There is
no provision for identifying the drawbacks.
The threat to Canadian sovereignty and government authority comes
not just from the politicians who try to sell these deals. The
threat is in giving trade officials, who seem incapable of
understanding societal values, the exclusive power to negotiate
trade agreements. The response of the federal officials at the
consultation to reminders of the MAI's failure, and to criticisms
from provincial and municipal officials, was all too predictable.
They had no response. The political and ideological language
barrier was insurmountable. They simply were unable to grasp what
was being said. The meshing of corporate and federal government
interests, language and perspective seemed virtually seamless.
regards,
Tom Walker
http://www.vcn.bc.ca/timework/covenant.htm
