Good evening. As Bill mentioned, my name Audrey Cormack and I’m the president of the Alberta Federation of Labour.

Tonight, I’ve been asked to say a few words about globalization and the MAI. More specifically, I’ve been asked to talk about the effect that these two closely related items are having on working people here in Canada and around the world.

Obviously, this is a big topic – so I’m going to divide my talk into three sections.

First, I’d like to lay the groundwork for my discussion by giving some definitions. I will attempt to define the term "globalization" by giving a brief run-down on recent economic history. I will also attempt to explain how the MAI fits into the picture.

In the second section of my talk, I will turn to the central question of how working people are being effected by globalization in general – and how they would be effected by the MAI in particular.

Finally, I’d like to wrap up by talking about strategies for resistance. I will talk about some of the actions that have been already been taken to oppose the MAI – and I will give my opinion about what is the best way forward.

But before we start talking about solutions and strategies for action, let’s talk about the problem. And in our case the big problem is obviously the Multi-Lateral Agreement on Investment.

What is the MAI?

The first thing that should be said about the MAI is that it is not something entirely new or entirely unexpected.

The MAI should not be looked at in isolation – it has to be put in the proper historical context. When we do this, we see that it is just the latest step in an on-going trend towards the global integration of markets and economies.

To really understand what the MAI is and why it is even being discussed today, we have to go back to the end of the Second World War. It was at that time that the industrial nations – countries like the U.S., Canada, England and France – began shaping the global economy that we are living in today.

Beginning in 1944 with the Bretton Woods agreement, the developed nations started tearing down their tariffs and trade barriers. The idea was to open national borders and promote prosperity through international trade.

Within a few years of Bretton Woods, the movement towards a new, more integrated global economy was well underway.

New international trade agreements like the General Agreement on Tariffs and Trade were signed. New international agencies and institutions like the International Monetary Fund and the World Bank were created. And new multi-national corporations and business conglomerates began opening offices and spreading their influence around the world.

This was the first wave of globalization – and it profoundly changed the nature of the world economy.

As a result of all the changes, trade between nations sky-rocketed.

Before Bretton Woods the volume of world trade was measured in the millions of dollars. But under GATT in the 50s and 60s it was being measured in billions and even trillions. For most people in the business community it was a new golden age.

But, as we know today, the trade liberalization of the 50s, 60s and 70s was just the first step.

Since the fall of the Berlin wall and the collapse of the Soviet Bloc in 1989, the pace and scope of globalization has expanded more rapidly than any of the architects of early liberalization schemes could have imagined.

The acceleration of globalization in the past decade has, of course, been aided and abetted by new computer and information technologies that allow corporations and investors to transfer billions of dollars around the world in the blink of an eye.

The global economy has also been transformed over the past ten years by a new generation of international trade agreements – like the Canada-U.S. Free Trade Agreement and NAFTA in North America and the Maastricht Treaty in Europe.

These agreements are similar to earlier agreements like GATT in that they break down tariff barriers and open borders to trade. But they go further than the old agreements – much further.

The new generation of agreements have, once again, transformed the world economy – and they have taken globalization to a new level.

Again the volume of international trade has sky-rocketed. Again, barriers and protections for national economies have been reduced. And again, people in the business community are counting their growing profits.

In the new global economy -- the world in which we live today – the economies of different nations are more integrated than they have ever been. Trade between countries – especially between countries in the so-called developed world – has never been easier.

But, interestingly, there is still one area of the world economy where advocates of liberalization have not made as many inroads as they would like – and that is the area of investment, particularly foreign investment.

Despite all the agreements removing barriers to trade in goods and services, many nations, including Canada, have maintained at least some regulations on foreign investment.

Even NAFTA, which is viewed by many as the standard-setter in terms of trade liberalization, allows signatory governments to impose some restrictions on investment from abroad. For example, it allows the Canadian government to impose modest restrictions on foreign investment in areas like health care, education, culture and natural resources.

This is the situation we find ourselves in today – the international business community has basically gone as far as they can go in terms of liberalizing, globalizing and deregulating trade in goods and services. Now they are turning their sights on investment. For global corporations, the liberalization of international investment rules is the "final frontier" – it is the "Holy Grail."

This is where the MAI comes in. The MAI is the tool that the international business community wants to use to break down the remaining barriers to foreign investment around the world. It is the culmination of the 50-year trend towards global integration.

As we all know, the implications of the MAI – or any other international agreement on investment – are serious.

Advocates of this kind of deregulation like to hide the true meaning of the MAI by using re-assuring language. They talk about the need to "remove discriminatory rules" and "promote equal treatment for foreign companies."

Who could argue with taking action against discrimination? Who would oppose equality?

Well, once we get past the rhetoric, we see that deregulation and liberalization in the area of investment isn’t really about the fight for equality or the fight against discrimination. It’s about promoting the interests of international corporations at the expense of individuals or communities.

The goal of the MAI -- or any other international agreement that world leaders may cook up to stand in its place -- is to limit the role of governments. The goal is to let investment flow as easily between countries as currently flows between cities and provinces.

On the surface this may sound harmless. After all, investment is a good thing, isn’t it?

But we know that the truth is more complex than that.

We know, for example, that the MAI will limit the ability of governments to promote and protect local businesses. We know that it will limit the role that governments can play in promoting job creation and regional development. And we know that it could spell the end for publicly-funded services like Medicare.

These are the inevitable results of liberalization in the area of investment.

That leads me to my second area of discussion for this evening and the big question on the minds of many of us: How are working people being effected by globalization and how will they be effected by the MAI?

In answer to these questions, the first thing that has to be said is that globalization isn’t all bad.

No one can deny that the globalization of the 50s, 60s and 70s played a large part in improving the standard of living for working people here in Canada.

The problem isn’t that we live in a global economy – there’s no doubt that trade between nations can promote prosperity. The problem is that the current advocates of the MAI are taking the idea of globalization and liberalization to dangerous extremes.

Here, I’d like to draw a distinction between, the "old globalization" – which focused simply on promoting trade between nations – and the "new globalization" which ties the hands of democratically elected government, ignores the interests of individuals and communities and focuses exclusively on the enrichment of corporations and investors.

From our point of view at the Alberta Federation of Labour, the "new globalism" that is being ushered in by agreements like NAFTA and the MAI is bad for working people Canada in at least five ways.

First, the new globalism is bad for working because it undermines our bargaining power.

For those of you who have read Marx, you will remember his reference to the "reserve army of the unemployed." Well, in the new global economy, that army just got a whole lot bigger.

Now that trade barriers have tumbled and now that corporations can transfer billions of dollars from one country to another in blink of an eye, workers here in Alberta are no longer only competing with workers in other provinces and the United States – they are also competing with workers in places like Mexico and China.

This obviously puts downward pressure on wages and it increases job insecurity. Some people shrug this off as a blue-collar problem – but it’s not. Just last month, I read about India’s booming software industry. Workers in the developing world are acquiring skills that used to be held almost exclusively by workers in the industrial world. And thanks to falling trade barriers, they are coming into direct competition with Canadian workers.

The result of all this increased competition in the labour market is that most workers are losing clout when it comes to their ability to negotiate decent wages and conditions of work. This is a major problem for workers here in Canada and elsewhere in the developed world.

The second major reason why globalization is bad for working people has to do with public services.

As we all know, agreements like the MAI put publicly-funded and operated services like Medicare at risk. Losing these services may not mean much to wealthy individuals who can afford to pay for private alternatives. But for working people – people like you and me – the loss of things like Medicare will be devastating.

Publicly-funded services give working people the kind of security and peace of mind that they will never have in a totally private, deregulated system. The wealthy will buy alternatives. They poor will struggle or simply do without.

The third reason why agreements like the MAI are bad news for Canadian workers is that they may actually result in decreased investment and declining job creation in Canada.

This may come as something of a surprise. After all, we’re told that the whole point of the MAI is to encourage investment. But, here in Canada at least, the magic link between deregulation and investment doesn’t seem to exist.

Both the Free Trade Agreement and NAFTA have already loosened many of Canada’s investment rules.

But the real result of these changes is that wealthy Canadians are investing more of their money outside of Canada. In fact, the capital going out of our country under the FTA and NAFTA has consistently exceeded the amount coming in from foreign investors.

So instead of seeing more investment, money that would have and could have been invested to create jobs and bolster the economy at home is going abroad. So much for the benefits of Adam Smith’s invisible hand!

The fourth reason why the MAI and globalization are bad news for working people in Canada has to do with something called "performance requirements."

Up until recently, the Canadian federal government and our various provincial governments have been able to impose certain requirements on foreign investors. For example, the government may say to a foreign investor "you can invest in Canada – but only if you agree to create a certain number of jobs or invest a certain amount of money in the local economy."

This is the kind of thinking that was at the heart of some our most successful trade deals. The Auto Pact, for example, has brought billions of dollars in investment to Ontario and Quebec. It has also created tens of thousands of good jobs.

But if the MAI is introduced, all this would come to an end. Canada and other signatory countries would no longer be allowed to require anything from investors. Clearly this is bad news for individuals, communities and the Canadian economy in general.

The fifth reason why globalization and the MAI are bad for working people is that they are accelerating the breakdown in the social contract that used to exist between businesses, their workers and the communities in which they operate.

There used to be an old saying that "What’s good for GM is good for is good for the country." But, now that international companies are more free than ever to move their investments from one country to another, this is no longer the case. What’s good for any corporation is no longer necessarily good for the country – it’s just good for the corporation.

These are just a few of the things that worry me about globalization and the MAI – there are, of course, many other causes for concern. But the bottom line is that the new global economy has not been treating Canadian workers well. It has given international investors and multinational corporations more and more power and profits. Workers, on the other hand, have been given something different. They’ve been given reduced bargaining power, declining wages, increased job insecurity and the loss or erosion of public services that they cherish. Clearly, there is no reason for most workers to celebrate the arrival of the new global economy.

But the implications of the "new globalism" are even worse for workers in the developing world. The volatile movement of capital in the new global economy is already hurting workers in places like Thailand, Mexico – and most recently – Indonesia.

Without investment controls, money has flooded into many developing countries, driving currencies and local stock prices up to unsustainable levels.

Unregulated foreign investment has fueled dramatic speculative booms that ultimately collapse. We saw this in Mexico and we are still seeing it in Asia.

Media coverage of these economic disasters has usually focused on the financial and economic repercussions – especially for North American investors.

But the real victims of speculative busts and unregulated investment are individual working people. In countries like Thailand, Mexico and Indonesia, the new globalism has left a trail of shattered hopes and shattered lives in its wake.

The developing world’s experience with unregulated foreign investment should be seen as an important lesson for those of us here in Canada.

One of the only reasons these kind of financial catastrophes haven’t happened in developed countries like Canada or certain developing countries like South Korea is that these countries have stricter controls on investment.

Here in Canada, for example, we have traditionally restricted foreign investment in key areas of the economy like oil and gas. We have also set up agencies to scrutinize foreign takeovers of industry.

If we remove these investment restrictions – and we are already seeing them be dismantled piece by piece – then we will be nearly as vulnerable to the whims of investors and speculators as the countries of South East Asia. We will no longer be immune to the kind of collapse that shook the foundations of the Asian economies.

When we look at what is really happening, we see that foreign corporations operating in developing countries almost always take more out of local economies than they put back in.

Without investment rules to tell them otherwise, multi-national corporations operating in the developing world rarely invest in local training or research and development. They rarely buy source components for their factories from local suppliers. They rarely observe high labour standards. And, of course, they usually pay ridiculously low wages. They also pick up and move whenever the winds of the economy start to blow less favourably.

The Mexican Maquaidora experience and the Asian experience clearly put the lie to the conservative argument that foreign investment is always a good thing.

When you look at the record, the truth is clear: Totally unregulated investment has done more harm than good to economies in the developing world. And if allowed to spread, it will destabilize economies in the developed world as well.

Clearly, the MAI and the new globalism are not in the best interests of working people. The big question is: what can we do about it?

That leads me to our third and final topic for discussion tonight: strategies for resistance.

When it comes to fighting the new globalism, I think we have to start by realizing just who we’re up against. We’re up against some of the biggest corporations, the wealthiest individuals and the most powerful politicians in the world.

It’s kind of daunting, I know. But despite what seems like a David and Goliath match up, I’m optimistic.

I’m optimistic because we’ve already won some battles.

Just two months ago, we derailed the MAI talks – at least temporarily. Clearly, the proponents of free global investment haven’t given up – they will continue pushing for their brand of liberalization either through further MAI negotiations or during the next round of talks on the WTO.

But no matter where they move the battle, it will never be as easy for them as it was a few years ago.

Five years ago, when representative from the OECD countries first started negotiating the MAI, they relied on secrecy and public apathy to get the deal put into place.

But we stopped them by bring the MAI out of the backrooms and into the public spotlight. We stopped them by telling the public what the MAI would mean to public services, job creation, the environment and democracy.

For most of the people involved in the fight against the MAI, the focus has been on education and mobilization. From my point of view, that has to continue.

But, while protests and forums and media events will continue to be an important part of our struggle, by themselves they are not enough.

The AFL firmly believes that people opposed to the MAI have to make their concerns felt at the negotiating table. Whenever and wherever world leaders gather to discuss liberalized investment rules, we have to be there.

It’s not enough to remain on the other side of the door looking in. We have to fight for seats at the table.

We have to come prepared to suggest changes and amendments to treaties and agreements. And we must come prepared to bargain and fight for deals that protect the interests of individuals and communities.

The labour movement has already been involved in this kind of effort. Through the Trade Union Advisory Committee of the OECD, unions from around the world have been demanding some very specific changes to the MAI. For example, we have demanded that the deal include a clause committing government’s not to lower labour standards to attract investment.

This kind of lobbying has to continue. We have to make sure that these agreements – when they are signed, as they inevitably will be – do as little damage as possible to the lives of working people and the communities in which they live.

From our point of view, we have to accept that the world economy has become more globalized. To a certain extent, we have to admit that we can’t stop it and that we can’t turn it completely around. But what we can do is look for ways to make the new economy work for ordinary people.

We must start by educating people about the dangers of laissez faire extremism.

We must educate people about the important role that national governments have to play in protecting the interests of individuals and communities. And we have to educate people about why it’s so important to leave governments enough tools to make decisions in the public interest.

That means we can’t simply "let the market decide."

Whatever agreements are signed, governments must be left with the power to defend and expand public programs like Medicare. They must be left with the power to restrict foreign investment in certain sectors of the economy. And they must be left with the power to impose performance requirements on investors – requirements that would obligate companies to create jobs, invest locally and observe high labour and environmental standards.

As activists and opponents of the globalization agenda, we must also do all we can to make individual corporations accountable. We must not let multi-nationals get away with abusing workers or the environment in other countries – even if those countries are on the other side of the globe.

That’s why our campaigns against Nike and against the exploitation of child labour are so important. We should see our work against individual corporations and against the MAI as two parts of the same campaign.

Finally, and probably most importantly, now that the global economy is being profoundly transformed, we need to spark a debate about what kinds of new international institutions and agreements are needed to regulate the "new economy".

If companies are going to operate without borders, we need rules and standards that straddle borders. And if corporations are going to use international bodies like the IMF to further their global interests, then we need international bodies to protect the interests of working people.

These are just a few suggestions about how we should organize our resistance to the MAI. Obviously, different groups may adopt different approaches. But when it comes down to it, the most important this is that we continue the fight and that we continue to stick together. We have an obligation to future generations to make sure that the new global economy doesn’t become a new global disaster.

Thank you for this opportunity to discuss globalization and the MAI. I look forward to your questions and comments.