U.S. trade representative makes case for international trade pact

Russell Osgood, left, the Allan R. Tessler Dean of the Law School, speaks with Deputy U.S. Trade Representative Jeffrey Lang during the symposium on international investment in the MacDonald Moot Court Room of Myron Taylor Hall, March 6. Nicola Kountoupes/University Photography

By John Wilson '98

While acknowledging the potential drawbacks of a proposed international trade compact, Jeffrey Lang, the deputy U.S. trade representative, maintained the agreement would benefit the U.S. economy in his keynote address at the 1998 Cornell International Law Journal symposium March 6.

The subject of the Law School's two-day event in the MacDonald Moot Court Room of Myron Taylor Hall concerned how countries should regulate foreign investment. Lang explained the provisions of the Multilateral Agreement on Investment (MAI), a new trade accord that would make it easier for the 29 most developed nations in the world to do business with each other. If it is ratified, he said, these countries would each be required to treat companies of the other 28 in the same manner as domestic ones.

"Being open to foreign investment is a good policy," Lang said, observing that the United States attracts more foreign capital than any other nation because it offers a low-risk environment that virtually assures a return on investments. The MAI would increase the security of the markets in question, and presumably, lead to more investment in this country.

Opponents of the agreement charge that, despite its seemingly innocuous and useful goals, the MAI's stipulation about equal treatment would give communities less control over businesses' activities. For example, favoring a local company over a foreign one by offering the former a low-interest loan would not be allowed. Nor could a community require a foreign company to employ local workers or use locally produced raw materials.

On the eve of Lang's address, about three dozen people gathered in Goldwin Smith Hall to discuss the implications of the agreement. A few came to plan a demonstration at Lang's speech, but most came to hear the views of three panelists critical of the MAI.

One panelist, Brian Eden of the Labor-Environment Network, worried that foreign companies might use the MAI's mechanism for trade dispute resolution to contest laws they dislike. If the companies win, on grounds that regulation hinders profit-making and makes their investments less secure then labor, the environment and human rights would be threatened. And he added, "If we can't regulate foreign corporations, domestic ones are going to argue that's a competitive disadvantage."

By the time Lang entered the MacDonald Moot Courtroom on Friday, some 50 protesters had gathered, joining other audience members. The demonstrators held up posters with slogans such as "MAI: More Acute Inequality" and "Human Rights Before Profit" when Lang began speaking, but he asked that the signs be lowered. "You can put them up later, when I've finished," he said.

In his lecture, Lang anticipated objections to the trade pact, saying, "We must make sure that the MAI won't impede regulation." Regarding the agreement's methods of arbitration, he noted: "There's no MAI police, and no MAI jail. U.S. sovereignty is not going to be questioned. Congress can pass a law inconsistent with MAI, but it will be subject to dispute resolution."

In the question-and-answer period, one woman reproached multinational companies for harming the environment and the inhabitants of underdeveloped countries. Lang countered by casting doubt on the assumption that the absence of foreign investment in those nations would end environmental abuses and stated that corporations' presence there is "doing a lot of good."

When the address was over, the protesters carried their signs away and few made it to a reception that followed. But their relative reticence did not signify acquiescence with Lang. Many said they felt their specific criticisms would be ignored in the final negotiations, in favor of corporate interests.

The MAI has received almost no attention in the national media. Lang said that there "has not yet been enough public debate" about it and that due to many unresolved issues, he did not expect the accord to be completely negotiated by next month as originally scheduled.