NFHS CX Topic Selection Proposal

Multinational Corporations

By: Fanny Flisowski

August 1, 2015

Proposed Resolutions

1. The United Nations will substantially increase its effort to

significantly reduce violations of human rights, lobbying for and

participating in manipulated international agreements and/or

environmental damage created by multinational corporations.

2. The United States federal government will substantially increase

its effort to reduce labor rights violations among its trade partners.

3. The United States federal government will substantially increase

its labor rights and/or environmental protections in current and

future/proposed free-trade agreements.

4. The United States federal government will substantially increase

its effort to reduce environmental rights violations among its trade

partners.

5. The United States federal government will substantially increase

its effort to promote labor rights among its trading partners.

6. The United States federal government will increase requirements

for environmental standards among trade countries.

7. The United States federal government will increase its labor

protection requirements in current and future trade agreements.

8. The United States federal government will increase its labor

protection requirements in current and future free trade

agreements.

Introduction

The term “multinational corporations” describes any corporation or

enterprise that operates in several different countries but is managed in

one country. The definition also requires that the corporation get a

quarter of its revenue from operations outside the home country. One of

my big concerns with this would be that every debate would boil down

to percentages and math. Affirmatives would need to provide revenue

information for different corporations and Negatives would try to prove

that the revenue only constituted 24% and was therefore, not topical.

This would make for a both a bad and boring debate.

Utilizing multinational corporations as the focus of the debate

would prove to be too limiting and predictable. There would be very

little ground since the logistics chain is generally not considered part of

a multinational corporation. In very predictable companies such as

Apple, the debater could not talk about Chengdu since the labor is

outsourced and not considered part of the corporation. Some

corporations that would follow that definition are Coca-Cola, Pepsi, and

McDonalds. By focusing the topic on globalization, the affirmative

could still choose to debate multinational national corporations.

Globalization logistics chain is the area where most of the harms would

be accessed since it links to topics such as human rights abuse and

environmental damage.

Implementing feedback received on the draft paper, the focus has

been narrowed to labor rights and environmental protection. As for the

free trade agreements, the United States currently has 14 FTAs in force

with 20 countries. The United States is also in the process of negotiating

a regional FTA, the Trans-Pacific Partnership, with Australia, Brunei

Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru,

Singapore and Vietnam. While 14 FTAs may sound like a lot of

potential affirmative possibilities, the debate will be narrowed by the

similar characteristics that the agreements share.

Key Issues

Timeliness

The time to discuss labor rights and environmental standards is

now. The Trans-Pacific Partnership and the Transatlantic Trade and

Investment Partnership are making headlines and it is imperative that we

discuss how these and other FTAs have impacted labor rights and

environmental standards around the world.

First, we need to look at the current issues with FTAs and a

globalized workforce. In the status quo, there is no uniformity and

different trade partners are made to follow differing sets of labor

guidelines. Fifty years after the signing of the Havana Charter, the lack

of consensus among the contracting parties of the GATT meant that no

specific reference to labor standards was introduced into the 1994

Marrakesh Agreement which established the World Trade Organization

(WTO). In 1998, the ILO’s Declaration on Fundamental Principles and

Rights at Work provided four core labor standards: freedom of

association and the effective recognition of the right to collective

bargaining, the elimination of all forms of forced or compulsory labor,

the effective abolition of child labor, and the elimination of

discrimination in respect of employment and occupation. However, very

little recourse is provided for the employees that have been affected and

there are few consequences for those companies or governments that

violate labor standards.

Secondly, FTAs have fostered rapid production, trade and

consumption of material goods in unprecedented quantities.

Globalization promotes emissions from transport, encourages

deforestation, and reduces biodiversity. Very few protections or

procedures exist for imported goods.

Affirmative Advantages

A large part of the debate will be the impact of globalization upon not

just the US, but the world as well. Proponents of globalization will have

a great deal to discuss as the affirmative argues that, while free-trade

must be balanced with environmental and labor protections, free-trade is

still the superior economic system. Advantages regarding decreasing

poverty, especially in the developing world, as well as increasing

infrastructure, education, and quality of life, are all good affirmative

positions. A good summary of the affirmative is that globalization is

good but needs limits and regulations.

There are also several other significant and important advantages that

affirmatives have access to from the topic. Stopping human-trafficking

and increasing human rights are becoming more and more important to

nations and corporations. Increasing environmental protections,

especially as developing countries face very real costs and impacts from

climate change, is an important part of the topic.

Negative Arguments

There are a variety of negative arguments that apply to this topic that

debaters will be familiar with. Arguments against capitalism and US

intervention in global markets, both as disadvantages and kritiks, are

relevant. There is ample counterplan ground, as large nations and

markets such as China, India, Japan, the European Union, and Russia

could all take similar action to the US with different and competitive

outcomes. Other counterplans could be arguing for different economic

practices to counter objections to globalization and free-trade. Normal

negative arguments regarding spending and politics are applicable, and

trade-off arguments in particular are strong positions. Though not all

trade is zero-sum, many markets are, and US action in one market will

impact other markets. Arguments to maintain the status quo will be

competitive, especially in regards to international norms regarding tariffs

and trade. In particular, status quo arguments arguing any attempt to

limit free-trade should be rejected will be featured. A strong negative

argument would be that any action taken by the US to regulate and

reform labor in other countries could be applied to the US itself; the

WTO requires that any change to a foreign trade good, such as removing

led from Chinese paint, must also be applied to US goods. This could

lead to unexpected consequences for US action. Agent counterplans and

plan-inclusive counterplans also remain viable in the topic.

Just as arguments for free-trade work for the affirmative, arguments

against free trade are just as strong. Opponents of globalization

frequently cite how it concentrates wealth in developed countries and in

a wealthy elite inside those developed countries; how little globalization

has increased multinational corporations accountability, and that

affirmative action cannot go far enough to stop the harm. An interesting

argument could be how globalization, even limited by the affirmative,

gives increasing power to multinational corporations to act in the

political arena.

Harm/Case Areas

The scope will vary depending on which resolution is chosen. A

few of the possibilities are listed.

Labor

Wages – As corporations seek to increase their profit margin, they will

want to conduct business in countries which allow them to pay lower

wages.

Race to the bottom - A “race to the bottom” occurs when governments

deregulate the business environment or taxes in order to attract or retain

economic activity in their jurisdictions, resulting in lower wages, worse

working conditions and fewer environmental protections. As

corporations seek to lower labor and environmental costs, they will

utilize this to operate with worsening conditions.

Human trafficking/ Indentured/ Force labor - The trade of humans,

most commonly for the purpose of sexual slavery, forced labor or

commercial sexual exploitation for the trafficker or others is a

widespread problem with a globalized workforce. In Thailand, it is an

open secret that slavery is used for its fishing industry and the issue has

become acute in recent years. As the global demand for seafood has

increased, the Thai economy improved, so attracting workers to

dangerous jobs on fishing boats has become more difficult. Brokers find

workers in neighboring countries and promise them better pay. Once in

Thailand, they are put in a fishing boat and made to work long hours

with little sleep or food. Their passports and any identification are taken

away and they are frequently beaten by the boat captain.

Child labor – MNCs face particular challenges in the area of child

labor. It continues to exist in the global workplace despite standards

established by the International Labor Organization (ILO) prohibiting

the employment of children under 14. The topic tends to focus on the

definition of the minimum age for employment although there are plenty

of other issues which include the effect of child labor on both the child

and society at large, harmful methods of recruiting children, the health

effects of child labor, the limited educational opportunities for employed

children and the displacement of adult workers by lower paid child

workers.

Working conditions – Globalization causes some workers to see an

improvement in working conditions while other will see working

conditions fall. The affirmative could argue that the net benefits should

not justify some workers experiencing worse working conditions.

Environmental

Pollution – There are very few consequences for MNCs polluting their

production area. Run off leaves local residents without clean water while

CO2 emissions create uninhabitable areas and contribute to global

warming. Emissions are also created by the transport of the traded good

which increase worldwide emissions.

Mining - Unregulated mining has the potential to release harmful

substances into the soil, air, and water. If no action is taken to remediate

the many environmental problems inherent to modern mining, the end

cost for governments and communities would be devastating. Already

mines in China release 9,600 to 12,000 cubic meters of toxic gas

containing flue dust concentrate, hydrofluoric acid, sulfur dioxide, and

sulfuric acid for each ton of rare earth elements produced. Additionally,

nearly 75 cubic meters of acidic waste water and one ton of radioactive

waste residue are generated (Paul & Campbell, 2011).

Logging/Deforestation - Forests provide a buffer to filter water and to

hold soil in place. They sustain water and soil resources through

recycling nutrients. In watersheds where forests are degraded or

destroyed, minimum flows decrease during the dry season, leading to

drought, while peak floods and soil erosion increase during the wet

season. Deforestation is mainly due to the conversion of forests into

agricultural land.

Overfishing – Overfishing has emptied the oceans of some fish species.

Stocks of Atlantic cod collapsed in the 1970s and Mediterranean Bluefin

has met with the same fate.

Negative Ground

Investor-State Dispute Settlement (or I.S.D.S.) provisions – These

provisions allow foreign investors to sue governments when they feel

they have not received “fair or equitable treatment,” and to have their

cases heard not by a domestic court but by an international arbitration

tribunal made up of three lawyers. A concern of I.S.D.S. policies is that

they allow MNCs to override government policy. While these cases used

to be rare, they are becoming a growth industry. I.S.D.S. was originally

meant to protect investors against seizure of their assets by foreign

governments. Now I.S.D.S. lawsuits go after things like cancelled

licenses, unapproved permits, and unwelcome regulations. The language

of I.S.D.S. provisions is often vague and allow lawyers a lot of leeway.

Canada lost a case where it had rejected, after an environmental study, a

proposed mining and marine-terminal project. The country was also

sued when Quebec imposed a moratorium on fracking. Germany is in

the midst of a $4.7-billion lawsuit occasioned by its decision to phase

out nuclear power. Uruguay is facing a lawsuit from Philip Morris

International, much like the one brought against Australia. There’s

nothing wrong with domestic courts reviewing government regulations,

but outsourcing the responsibility to international tribunals is troubling.

Protectionism - Trade protectionism is used by countries when they

think their industries are being damaged by unfair competition from

foreign industries. It's a defensive measure, and is usually politically

motivated. It can often work, in the short run. However, in the long run

it usually does the opposite of its intentions. It can make the country, and

the industries it is trying to protect, less competitive in international

trade.

Favored Nation Status - Most-favored-nation (MFN): treating other

people equally Under the WTO agreements, countries cannot

normally discriminate between their trading partners. Grant someone a

special favor (such as a lower customs duty rate for one of their

products) and you have to do the same for all other WTO members.

This principle is known as most-favored-nation (MFN) treatment (see

box). It is so important that it is the first article of the General

Agreement on Tariffs and Trade (GATT), which governs trade in goods.

MFN is also a priority in the General Agreement on Trade in Services

(GATS) (Article 2) and the Agreement on Trade-Related Aspects of

Intellectual Property Rights (TRIPS) (Article 4), although in each

agreement the principle is handled slightly differently. Together, those

three agreements cover all three main areas of trade handled by the

WTO.

Some exceptions are allowed. For example, countries can set up a free

trade agreement that applies only to goods traded within the group —

discriminating against goods from outside. Or they can give developing

countries special access to their markets. Or a country can raise barriers

against products that are considered to be traded unfairly from specific

countries. And in services, countries are allowed, in limited

circumstances, to discriminate. But the agreements only permit these

exceptions under strict conditions. In general, MFN means that every

time a country lowers a trade barrier or opens up a market, it has to do so

for the same goods or services from all its trading partners — whether

rich or poor, weak or strong.

Definitions

Free Trade – a system of trade between nations in which there are no

special taxes placed on imports

General Agreement on Tariff and Trade - UN agency for promotion

of free trade between signatory countries (called contracting parties).

Formed in 1947 in Geneva, its objective was to counter the devastating

effect of protectionist measures (such as the US Smoot-Hawley tariff

that raised import duties from 39 percent to 53 percent) supposedly

intended to mitigate impact of the great depression

Read more: http://www.businessdictionary.com/definition/General-

Agreement-on-Tariff-and-Trade-GATT.html#ixzz3h7zHDOV2

Globalization – the act or process of globalizing :  the state of being

globalized; especially :  the development of an increasingly integrated

global economy marked especially by free trade, free flow of capital,

and the tapping of cheaper foreign labor markets

International Labor Organization - The agency of the United Nations

that is involved in the interests of labor throughout the globe. Focusing

on 18 themes, the ILO works with governments, businesses, and workers

to create decent work environments. They also research and publish

labor statistics.

http://www.businessdictionary.com/definition/International-Labor-

Organization-ILO.html#ixzz3h7ynlxeX

Labor rights – group of legal rights and claimed human rights having to

do with labor relations between workers and their employers, usually

obtained under labor and employment law.

Labor - human activity that provides the goods or services in an

economy; the services performed by workers for wages as distinguished

from those rendered by entrepreneurs for profits

Most favored nation treatment - guarantee of trading opportunity

equal to that accorded to the most-favored nation; it is essentially a

method of establishing equality of trading opportunity among states by

making originally bilateral agreements multilateral. As a principle of

public international law, it establishes the sovereign equality of states

with respect to trading policy. As an instrument of economic policy, it

provides a treaty basis for competitive international transactions.

Multinational Corporations - An entity managed from one home

country and in business in several countries. A company or group is

considered a multinational corporation if deriving 25% of revenue from

out-of-home-country operations.

Law Dictionary: What is MULTINATIONAL CORPORATION

(MNC)? definition of MULTINATIONAL CORPORATION (MNC)

(Black's Law Dictionary)

Trade - the activity or process of buying, selling, or exchanging goods or services; the amount of things or services that are bought and sold; the money made by buying and selling things or services; the act of exchanging one thing for another

World Trade Organization - UN multilateral trade organization

formed on January 1, 1995 (after culmination of the Uruguay Round) as

the successor to GATT and the court of final settlement in trade

disputes. Its objectives included (1) removal of all barriers to

international trade in goods, services, and intellectual property, (2)

equitable and speedy resolution of disputes between trading partners,

and (3) identification of non-compliance with trade agreements.

Read more: http://www.businessdictionary.com/definition/World-Trade-

Organization-WTO.html#ixzz3h81oBiIu

References

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Globalization. (n.d.). Retrieved July 27, 2015, from http://www.merria-webster.com/dictionary/globalization

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Irvine, D., Mohsin, S., & Olarn, K. (2015, May 17). Can Thai Fishing Industry Tackle its Slavery Pproblem? - CNN.com.

Retrieved July 5, 2015.

Labor. (n.d.). Retrieved July 27, 2015, from http://www.merriam-webster.com/dictionary/labor

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http://www.britannica.com/topic/most- favored-nation-treatment.

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https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm

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U.S. Free Trade Agreements. (2013, January 11). Retrieved from Export.gov: http://www.export.gov/index.asp