URGENT ACTION: STOP MAI IN IMF! (fwd)

[Robert Weissman <rob@essential.org>]

---------- Forwarded message ----------
Date: Wed, 25 Mar 1998 14:18:24 -0500 (EST)
From: Chantell Taylor <ctaylor@citizen.org>
To: Multiple recipients of list MAI-NOT <mai-not@essential.org>
Subject: URGENT ACTION: STOP MAI IN IMF!

The following sign-on letter is being circulated as an urgent action against 
the upcoming vote to change the IMF's charter incorporating MAI provisions. 
Show your continued solidarity against the MAI by signing the letter today! 
A note following this email will explain further the MAI in IMF.

Proponents are trying to call the vote before Spring Recess in US Congress 
(April 2nd) so time is of the essence - urgent responses needed.

Thanks for your support!

Chantell


PLEASE SIGN-ON TO THIS DRAFT LETTER!!  DEADLINE: THURSDAY (3/26, 10:00 Am)
CALL ROSANNA AT THE CITIZEN'S TRADE CAMPAIGN, 202-783-7400 X 213 TO SIGN-ON
(Attached are pertinent background materials)

THE MAI AT THE IMF
"Welcome to the MAI Shell Game."

Dear Representative:

	We, the undersigned groups, would like to bring to your attention a little 
known proposal that is circulating through the halls of the IMF that may 
give you further reason to oppose the $18 billion funding request that the 
Administration is seeking for the IMF.  The proposal is an amendment -the 
first in the IMF's history- to the IMF's Articles of Agreement.  The 
Amendment is based on some of the most extreme provisions of the MAI- those 
which force participatory governments to eliminate restrictions on capital 
flows and foreign ownership of land and other investments.

	We urge you to support the _______Amendment to the House FY98 Supplemental 
Appropriations Bill which requires the U.S. Secretary of the Treasury to 
vote "no" when the new Article is proposed at the IMF Board of Governors 
meeting in mid-April or lose the additional $18 billion funding increase.

	Amending the Articles of Agreement of the IMF requires an 85 percent voting 
majority by the IMF Board of Governors (mostly heads of finance ministries 
or central banks).  As the US holds 17 percent of the votes, the US 
Secretary of the Treasury could effectively veto any amendment of the 
Articles of Agreement.

	If the amendment passes, all member countries of the IMF, including the 
United States, will be forced to accept the capital accounts liberalization 
provision of the MAI which forces governments to remove barriers to 
international capital flows.  The IMF would be able to dictate the extent of 
the controls a country may maintain, the rate of the capital account 
liberalization, and changes in macroeconomic policy.

	Incredibly, Congress has not been informed of this change nor its 
substantial implications.  The Administration is apparently seeking to do 
through the secretive process of the IMF what it has thus far been unable to 
accomplish through the MAI negotiations currently being held at the OECD.

	At the very moment that citizen concern about the provisions contained in 
the MAI, such as "national treatment" of all foreign investment, is slowing 
down negotiations at the OECD, the


DRAFT Letter p.2

IMF is moving to assert its own global authority over such matters.

	Specifically, we oppose giving the IMF this authority for the following 
reasons:

	o The IMF operates behind closed doors and cannot be held accountable 
through any kind of democratic process.

	o Speculative investment will be encouraged by the proposed IMF by-laws 
change because it would prevent countries from setting up so-called 
"financial speed bumps" which slow the outflow of short-term capital.  A 
Chilean "speed bump" law helped to stem a possible financial panic in Latin 
America at the time of the 1994 Mexico peso devaluation.

	o Speculative investments will be further encouraged by preventing 
countries from regulating the nature of acceptable investments in their own 
country.  In the U.S., current law restricts foreign ownership of media, and 
certain national security related industries.

	o The objective of promoting the free flow of capital that benefits 
investors is given priority over other objectives relating to the democratic 
right to consider the purpose of investments in shaping the future of a 
country, and to values such as human rights, protection of workers and the 
environment.

	Therefore, we strongly urge you to deny the IMF bureaucracy this 
unprecedented authority over the sovereign rights of the United States and 
other countries to control capital flows within their national borders.

	Sincerely,