Iraq: How the US is getting a free trade agreement minus the negotiations

[Imperialism Inc.]

This CPA order (#39) is pretty old news but I thought this was a good analysis.

http://www.focusweb.org/main/html/Article363.html
(snip)

These agreements (MAI, NAFTA, FTAA, GATS) are still being fiercely opposed by social movements and people’s organizations around the world because they give disproportionate protection to the investor at the expense of the state and citizens. The MAI, a treaty that was being secretly negotiated in the Organization for Economic Cooperation and Development (OECD) created an uproar when the draft document was leaked in 1998. Civil society opposition was so intense that the OECD was forced to shelve it. The FTAA, called “NAFTA plus” by US negotiators is opposed by a hemispheric wide coalition of social movements, non-governmental organizations, trade unions and activists. Meetings of FTAA negotiators are regularly met by massive. The WTO’s latest Ministerial held in Cancun, Mexico, ended in disarray as protests combined with developing countries’ efforts to stick together effectively blocked negotiations and further agreements.

Order no. 39, which contains all the controversial investment provisions of these hotly contested agreements has, in contrast, had an easy passage: it was simply imposed o­n the Iraqis before they could even realize what was happening

(snip)
NATIONAL TREATMENT

“(1) A foreign investor shall be entitled to make foreign investments in Iraq o­n terms no less favorable than those applicable to an Iraqi investor, unless otherwise provided herein.

(2) The amount of foreign participation in newly formed or existing business entities in Iraq shall not be limited, unless otherwise expressly provided herein.”

(snip)

National Treatment for a foreign investor however, is not so simple. A foreign investor especially in the case of Iraq, carries with it a tremendous amount of capital compared to the domestic investor. In developing countries, governments realize this disparity between big capital and small capital, as represented by local initiatives or entrepreneurs, and have tried to “level the playing field” by providing incentives or benefits to the local producers. Under this national treatment provision, it will no longer be possible to implement such local developmental policies and the government will have to extend the same tax break it would give to an local producer, to a multi-million dollar corporation.

Many governments who have enshrined this policy of building the domestic and national capacity by writing this into their constitutions now have to re-write their laws to adhere to this National Treatment provision. Under NAFTA, national treatment means better treatment for foreign investors as it “establishes new rights applicable o­nly to foreign investors claiming compensation from taxpayers for the costs of complying with the same domestic policies that all domestic companies must follow.” (5) Order no. 39 cuts to the chase and decrees 100 percent ownership of investment by foreigners and national treatment before the Iraqis can write their constitution.

A policy like this will wipe out whatever domestic capacity or investment that still exists in Iraq.
(more)

[Larkspur]

1. A better name for these "trade aggreements" is

Robber Baronism!!!

[Imperialism Inc.]

2. Selfish kick

I know this has been covered to death but I really liked this article for not only its points about Iraq but what is wrong with "free trade" agreements in general. I find it interesting that this very basic decision about the structure of Iraqi society has been decided for Iraqis with no input from Iraqis.