Capitalist deception on foreign investment

The Multinational Investment Treaty – a close look behind the world trade argument

Ray Nunes October 1997

In the history of capitalism it is no new thing that the rich use every means to convince the poor that all that is done by the rich is for the poor’s benefit. The same holds true for rich and poor countries. There now exists a so-called World Trade Organisation (WTO) which has replaced yesteryear’s General Agreement on Trade and Tariffs (GATT), and the world is being subjected to a great propaganda campaign in favour of so-called ‘trade liberalisation’. Under the aegis of the Coalition Government, New Zealand is backing up the big imperialist states’ demands for ‘liberalisation’. This was also the case under GATT.

The class interests at stake

Labour’s spokesman on trade, Mike Moore is propagating the idea that every country will be better off without tariffs to protect their home industries and general economies. The issue of free trade or protectionism is not new. It was a massive tone of contention in Britain early in the last century. The landowners stood for protection; the manufacturers for free trade. So behind all the propagandist slogans from both sides, there lurked definite class interests determined by the hunt for profit. The capitalist class having become stronger than the landowners it pushed a Free Trade Bill through Parliament in 1846.

Either way, workers still exploited

Karl Marx wrote on the subject at the time and exposed the class nature of the struggle, pointing out that whichever class won, the workers would not benefit. They would remain an exploited class, subject to all the ups and downs of the capitalist system. The workers should, in fact, pursue their own class interests and not those of the ruling classes. They were the victims of the anarchy of production and consequent crises of overproduction specific to the capitalist system.

While the British pursued free trade and their capitalists profited thereby, both Germany and the United States pursued protectionism, that is, tariffs against cheaper imports in order to develop their economies profitably. The result was, in either case, the development of imperialist monopolies and the more intense monopolist exploitation of the working class.

Anti-protectionist demands

During the currency of GATT the rich imperialist bloc of countries demanded abolition of protective tariffs by the less developed world. They were highly efficient producers of manufactured goods and foodstuffs and aimed to batter down any tariff walls in order to expand the market for their cheaper products and the unrestricted right to invest their surplus capital in the countries with protective tariffs. Leading this drive was the United States. However, the experience of GATT’s operations did not enthuse other states which were retaining protectionist systems, such as Japan. The setting up of the WTO was a new attempt by the big imperialist states to force entry into protected markets.

Earlier in its history the Labour Party, while in government, plumped for protection. Now we find the Labour spokesman on trade, Mike Moore, giving full backing to the free trade agitation of the rich imperialists, the United States, Germany, Britain etc. who dominate the WTO. It doesn’t cause any qualms of conscience by Labour, for in reality they are Labour imperialists, serving monopoly capital no less than National.

Imperialism and the developing world

Moore even asserts that trade ‘liberalisation’ would benefit the under-developed world just as much as the developed world. However, spokesmen for the former such as Malaysia’s President Dr Mahathir are vigorously denouncing the big imperialist states for extending their domination over the developing countries of Southeast Asia. What are they basing their opposition on? Practical experience under both GATT and the WTO, not unsubstantiated theories.

At the present time Moore is campaigning for support for a Multilateral Investment Treaty which would abolish or vitiate any barriers to foreign investment in New Zealand. That means he is doing the work of the big imperialist powers. Not surprising, in view of New Zealand’s long history of being integrated with the big capitalist countries of the West in their imperialist bloc.

Both ways, capital wins

But the question is, should New Zealand give absolutely free access to foreign direct investment in this country, which is the aim of the WTO and its offspring, the Multilateral Investment Treaty. Let it be said that our Party, the Workers’ Party of New Zealand, is by no means in favour of a Treaty under which the dominant monopolies of the world, such as the great multinational corporations (MNC), can proceed to a virtual takeover of the New Zealand economy. But neither do we imagine that big New Zealand-owned firms such as Fletcher Challenge are less exploitative than big foreign capitalist concerns. In both cases the workers are still exploited by big capital for profit.

Is there an alternative road for the working class? Yes, there is. It is to wage an intensive struggle for a socialist order of society, and thus to put an end to capitalist exploitation, be it local or foreign. As long as monopolies control the world’s economy they will continue their regimes of exploitation for profit.

One as bad as the other

The working class should not be fooled either by propaganda for free trade or propaganda for protection. One is as bad as the other in this world of capitalist imperialism, based as it is on private property in the means of production. Production is social, but the appropriation of what is produced is private, meaning that there is constant conflict at the heart of imperialism between these two poles of the contradiction which moves capitalism forward. That conflict can only be overcome by the working class carrying on and intensifying the class struggle against the capitalists until they are able to seize political power and establish working class, socialist, political power.

That, in fact, is the overriding issue in today’s world, not free trade or protection which are only different names for capitalist exploitation. When that is abolished, all other social problems will be solved or on their way to solution.

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