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Activists use Internet to slow trade liberalization
US business leader sees free-trade threat

Jack Lucenti (Journal of Commerce Staff), 12/10/98

NEW YORK -- Increasingly mobilized by the Internet, labor and environmental activists are a growing threat to free trade and an open global economy, a business leader said Tuesday.

Abraham Katz, outgoing president of the U.S. Council for International Business, gave the keynote speech at the organization's annual dinner on Tuesday.

He will retire from the post in February, to be replaced by Thomas M.T. Niles, a former ambassador to Greece who has been serving as vice president of the National Defense University.

Mr. Katz laid out several accomplishments achieved during his 14-year tenure, as well as a number of continuing problems.

"The enemies of an open market system have marshalled a serious counterattack on further liberalization of trade and investment and on multinational companies as the main agents of globalization," said Mr. Katz, who joined the council after a long career with the State Department.

Officials of the business group have been alarmed about what they see as growing threats to business, often spurred by the Internet. For instance, recent charges that Nike Inc. mistreats its workers in southeast Asia were largely spread across the electronic medium.

Organized labor and environmental groups are pushing for unilateral sanctions against offending countries and companies, Mr. Katz said.

"The more worldly and knowledgeable among them (activists) are aware that the U.S. neither singly, nor in any combination of countries, can introduce a unilateral sanction-based approach into the multilateral rule-based system without tearing it apart," Mr. Katz said.

"Frankly," he charged, many of them "would just as soon see this happen."One of the chief accomplishments that Mr. Katz cited is the International Labor Organization's Declaration of Principles and Rights at Work, which was ratified in June at the ILO, a 174-member group affiliated with the United Nations.

Mr. Katz's organization saw the declaration as a way to use the UN to pursue better labor rights principles in countries that violate them egregiously, without letting those concerns get in the way of trade.

Labor groups that oppose the business group's agenda favor extending the declaration of principles so that it can be used to punish or sanction countries or individual companies.

"The objective of these groups, supported by certain governments, is to be able to judge the behavior of companies in what would amount to kangaroo courts in which non-governmental organizations and trade unions would have a major voice," he said.

Another initiative of the business group that Internet-mobilized activists have derailed is the Multilateral Agreement on Investment. That would standardize rules so that each country would have to treat outside investors the same way. It would protect investors from government interference such as arbitrary seizure of property.

Opponents say it would give multinational corporations unprecedented power to challenge governments' consumer, labor and environmental laws.

Mr. Katz also complained that labor groups have defeated fast-track trade negotiating authority for President Clinton. In September, the House of Representatives defeated a Republican-drafted fast-track bill. The president has pledged to bring a new, comprehensive fast-track bill to Congress in January.

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