WHAT'S HOT?MAI
 
WHAT IS THE MULTILATERAL AGREEMENT ON INVESTMENT (MAI)? 
 
 
Prepared by Janet M Eaton, Systemic Change Agent, Educator, Researcher. January 19, 1997. [jeaton@fox.nstn.ca] Prepared for the Nova Scotia Network for Creative Change and for general use.  
  
I) Voices of Proponents  
    a) From websites of proponents  
    b)  Excerpts from quotes compiled by the Preamble Collaborative 
  
II) Voices of Concern  
    a) From websites of concerned groups  
    b) From books, public policy papers, briefs, newspaper, articles etc  
    c) Quotes from individuals and institutes whose perspectives are changing or have changed.  
    d) Excerpts from quotes compiled by the Preamble Collaborative 
 

Acronyms:  
MAI:  Multilateral Agreement on Investment  
NAFTA:  North American Free Trade Agreement  
USCIB:  United States Council for International Business  
OECD:  Organization for Economic Cooperation and  Development  
 
 
I.a Voices of  Proponents - from the websites  
  

1) Government of Canada Website:  An Introduction to the MAI  
http://www.dfait-maeci.gc.ca/english/trade/backgr-e.htm  

An Introduction to the MAI:  The Origins and Progress of the MAI.  
The MAI is being negotiated under the auspices of the Organization for Economic Cooperation and Development (OECD). Membership in the OECD includes most of the world's industrialized democracies, including the United States and Canada, most European countries, Japan, New Zealand, Australia, Mexico and Korea.  

In 1995, Canada, together with other OECD member countries agreed to negotiate a Multilateral Agreement on Investment. The central purpose of this agreement is to provide a broad multilateral framework of agreed principles and commitments governing the treatment of foreign investment so that all countries can participate on an equal footing in the international marketplace for investment. An investment agreement negotiated among the OECD countries would set a high standard of investment protection and establish the basis for a wider agreement embracing many more countries.   
  

2) Organization for Economic Cooperation & Development [OECD] Website  
http://www.oecd.org/daf/cmis/mai/faqmai.htm  

The Multilateral Agreement on Investment: Frequently asked questions and answers:  

1. What is the MAI?  
"The MAI is the first attempt to combine in an international agreement multilateral disciplines on the three corner-stone areas of FDI rule-making, namely investment protection, investment liberalization and dispute settlement.  

Its objective is to provide a "level playing field" for international investors, with uniform rules on both market access and legal security. It aims at eliminating distortions to investment flows and facilitating a more efficient allocation of economic resources.  

The MAI is conceived as a free-standing international treaty open to all OECD Members and the European Communities, and to accession by non-Member countries willing and able to meet its obligations.  

Negotiations were launched by the OECD Member countries at the May 1995 Ministerial Meeting."  

3)  OECD Website  
http://www.oecd.org/daf/cmis/mai/dymond.htm  
The Main Substantive Provisions of the MAI W.A. Dymond, Chief Negotiator for Canada MAI briefing for non-OECD countries 7 September 1997 - Paris, France.  

"This is not the corporate agenda we are negotiating. This is a government agenda we are negotiating to negotiate and apply investment rules and level the playing field.  

We are seeking to replace the partial, piecemeal and largely unsatisfactory rules that now govern foreign investment with more comprehensive and widely accepted rules.  

The irony is that unless governments set the rules of foreign investment and do so in a coherent and coordinated way bound by international law, multinational enterprises will set their own rules and those rules will come at a heavy price.  

This is not a charter for corporations to evade environmental laws, to exploit labour, or to invade critical areas of national endeavor such as cultural or social policies.  

It is in fact the opposite. So long as governments set the rules, they will ensure that areas of national endeavor are nourished and protected.  

The MAI is an opportunity to negotiate a multilateral agreement based on the rules of non-discrimination which have fostered the enormous and hugely beneficial expansion of international trade in goods and services over almost 50 years.  

Its beneficiaries will be, not just businesses in the global economy, but the millions of ordinary citizens whose savings and pension funds make up the bulk of investment. They deserve a set of rules which are as clear and transparent as those long applied in international trade.  

4)  OECD MAI Home Page  
http://www.oecd.org/daf/cmis/mai/mai.htm  
  
Since the launching of negotiations in 1995,  major progress has been made in developing a Multilateral Agreement on Investment (MAI) which would provide a comprehensive framework for international investment with high standards of liberalization and investment protection, and with effective dispute settlement procedures.  

The scope of the MAI is to cover all forms of investment coming from MAI investors, including  the cross-border establishment of enterprises, the activities of established foreign-owned or controlled enterprises, portfolio investment and intangible assets. The treatment and protection of investors and investments calls for fair and non-discriminatory treatment of foreign investors, and an effective dispute settlement mechanism.  

Special topics dealt with in the MAI include performance requirements, investment incentives, temporary stay and work of investors and key personnel, privatization and monopolies. Environment and labor issues and the OECD Guidelines for multinational enterprises also Figure prominently in the negotiations.  

The MAI will have its own institutional arrangements. It should be compatible with other international agreements, including the International Monetary Fund and World Trade Organization, and should not create obligations on Parties that conflict with  
their obligations under those agreements.  

Final agreement will depend on achieving a satisfactory scope and balance of commitments among the negotiating parties, including agreement on general exceptions, temporary safeguards and country-specific exceptions or reservations.  

The MAI is to be a free standing treaty, open to accession by non-Members who are willing and able to meet its obligations. An active dialogue with non-Members has been sustained through the negotiations, including regular briefings in Paris, and regional  
meetings for Latin America, Asia, Africa, and the Baltic countries. Consultations have also been held with representatives of business, labor and NGOs."  
  

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I. b)  Voices of Proponents: Excerpts from quotes compiled by the Preamble Collaborative  
  

The MAI in the Words of Framers, Proponents and Opponents: A compilation of notable quotes on the MAI.  
http://www.RTK.NET:80/preamble/mai/maihome.html  

"When concluded, the MAI will become the next pillar in the global system of trade, finance, and investment".  - USCIB  

"The agreement will be based on a standstill agreement and a rollback principle: the parties will not be entitled to add non-conforming measures once the agreement has been signed. They will only be entitled to liberalize in the future.  
- Marinus W. Sikkel, Ministry of Economics, the Netherlands and MAI working group member-  

"Unlike earlier efforts to forge a multilateral investment accord, the MAI is intended to address a comprehensive range of investment issues, have a broad geographical scope, and provide for further liberalization of investment regimes. '  - USCIB-  

"We are writing the constitution of a single global economy."  
- Renato Ruggerio, Director General of the World Trade Organization-  

 
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II. a) Voices of Concern: from the websites  
  

1) National Centre for Sustainability Website:   
http://www.islandnet.com/~ncfs/maisite/  
"The MULTILATERAL AGREEMENT ON INVESTMENT (MAI)  being negotiated since 1995 in Paris by the 29 member nations of the Organization for Economic Cooperation and Development is to be ready for ratification in April 1998. The Agreement is intended to remove obstacles to international investment among its signatories by eliminating investor (corporate) performance requirements and discriminatory treatment of investors by host nations. It incorporates a powerful dispute resolution system which would allow any investor to sue the government of its host nation if it considers laws or regulations to be discriminatory and detrimental to immediate or projected profits. The Agreement would therefore disable regional development and national measures to protect the well-being of people, create employment, safeguard small business, conserve resources and protect the environment. Once signed, the MAI cannot be denounced for five years. Investments under the MAI would remain protected for a further fifteen years.  

The parties negotiating the MAI represent corporate interests exclusively. Consequently the MAI is a matter of great concern to organizations dedicated to protecting democracy, human rights and the environment."   
  
2)  The U.S. based Preamble Collaborative:  
http://www.RTK.NET:80/preamble/mai/maihome.html  

" Multilateral Agreement on Investment (MAI): A sweeping new international economic  agreement currently under negotiation, the MAI would amplify key provisions of the North  American Free Trade Agreement and apply them worldwide. Despite the agreement's potentially profound implications, and the advanced stage of negotiations, few among the general public have even heard of the MAI. The agreement is hailed by business groups and government officials as a boost to investment and jobs, but assailed by critics as a major  threat to living standards, environmental protection, and essential corporate regulations. The MAI could be before the U.S. Congress as early as the spring of 1998".  

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II. b) From books, public policy papers, briefs, newspaper articles etc. with web references where possible.  
  

1) From Clarke and Barlow, 1997. MAI: The Threat to Canadian Sovereignty. Canada: Stoddard.   ISBN 0-7737-5946-8  

In 1998 the nations of the world including Canada, celebrate the 50th annual anniversary of the United Nation's historic Universal Declaration of Human Rights. This Declaration marked a watershed in the long international quest to assert the supremacy of human and citizen rights over political or economic tyranny of any kind. Together with the International Covenant on Economic, Social, and Cultural Rights , the Declaration stood and stands as a 20th century Magna Carta.  

But in 1998, the richest nations of the world, including Canada, are also poised to ratify a treaty that will grant so much power to transnational corporations and stateless global capital that the democratic rights granted to the people of the world by the UN Declaration will be seriously compromised . The Multilateral Agreement on Investment (MAI) is the culmination of a global assault, in the name of commercial freedom, on those social rights and on the commitments to ecological stewardship made by the world's nations at the 1992 Rio Earth Summit.  

The MAI, if ratified, will serve as a Charter of Rights and Freedoms  for transnational corporations against citizens and the earth, and represents a grave threat to democracy in Canada and around the world.(Clarke & Barlow, 1997 p. 7-8)  
  

2) "MAI-Day! The Corporate Rule Treaty:  The Multilateral Agreement on Investments (MAI)Seeks to Consolidate Global Corporate Rule" by Tony Clarke.  http://www.policyalternatives.ca/mai.html  

Excerpt from the preamble to his paper:  

"....the MAI is designed to establish a whole new set of global rules for investment that will grant transnational corporations the unrestricted "right" and "freedom" to buy, sell, and move their operations whenever and wherever they want around the world, unfettered by government intervention or regulation." In short, the MAI seeks to empower transnational corporations through a set of global investment rules designed to impose tight restrictions on what national governments can and cannot do in regulating their economies...  

In effect, the MAI amounts to a declaration of global corporate rule. As such, it is designed to enhance the political rights, the political power, and the political security of the TNCs on a world-wide scale.......This new global constitution, however, is certainly not designed to ensure that the rights and freedoms of the world's people are upheld by democratically elected governments. On the contrary, it is a charter of rights and freedoms for corporations only - a charter to be guaranteed by national governments in the interests of profitable transnational investment and competition. It is meant to protect and benefit corporations, not citizens. Indeed, through this new global constitution, the rights of citizens and the powers of governments themselves will be largely superseded by those of the transnational corporations."   (Clarke, 1997 website)  
  

3) Joshua Karliner, The Corporate Planet: Ecology and Politics in the Age of Globalization (Sierra Club Books, 1997)  

Transnational corporations exert significant influence over the domestic and foreign policies of the Northern industrialized government that host them. Indeed, the interests of the most powerful governments in the world are often intimately intertwined with the expanding pursuits of the transnationals that they charter.  

At the same time, transnational corporations are moving to circumvent national governments. The borders and regulatory agencies of most governments are caving in to the New World Order of globalization, allowing corporations to assume an ever more stateless quality leaving them less and less accountable to any government anywhere.  

These corporations, together with their host governments, are reorganizing world economic structures--and thus the balance of political power--through a series of intergovernmental trade and investment accords. These treaties serve as the frameworks within which globalization is evolving--allowing international corporate investment and trade to flourish across the Earth.  

They include:  

* The Uruguay Round of the General Agreement on Tariffs and Trade (GATT)  

* The World Trade Organization, which was created to enforce the GATT's rules.  

* The North American Free Trade Agreement (NAFTA).  

* The European Union (EU).  

* The proposed Multilateral Agreement on Investment.( MAI )  

* Financial Services Agreement, signed 12 December 1997 becomes effective 1 March   1999.  
  

"These international trade and investment agreements (like MAI)  allow corporations to circumvent the power and authority of national governments and local communities, thus endangering workers' rights, the environment and democratic political processes."  

4) "Writing the Constitution of a Single Global Economy:  A Concise Guide to the MAI - Supporters and Opponents' Views". 1997 Michelle Sforza-Roderick, Scott Nova, and Mark Weisbro.  U.S. based Preamble Collaborative's Preamble Center for Public Policy   http://www.RTK.NET:80/preamble/mai/maioverv.html  

"The MAI is a new international economic pact currently being negotiated at the OECD. It is designed to ease the movement of capital - both money and production facilities - across international borders by restricting laws in participating countries that are viewed as impediments to capital flows. The proposed agreement's primary governmental backers are the United States and the European Union.  

The MAI is based on the investment provisions of the North American Free Trade Agreement (NAFTA). The MAI amplifies these provisions and, unlike NAFTA, which only applies to the U.S., Mexico and Canada, would apply them worldwide. The 29 mostly high-income countries that comprise the OECD would join first and then participation in the MAI would be offered to poorer nations.  

According to OECD officials, the MAI negotiators are considering rules that would "go well beyond the...provisions of other international agreements" and would "provide path-breaking disciplines on areas of major interest to foreign investors." (emphasis added)  

The MAI and the Global Economy: Over the last few decades there has been a rapid increase in the movement of capital, as well as goods and services, across international borders. ....These ....trends together make up what  is commonly referred to as "globalization," and there is heated debate among policy makers as well as non-governmental organizations as to the effects of this process on living standards, income distribution, democracy, and the environment.  

5) UN Commission on Social Development - Prepared for 10 - 20 February 1998; Item 3(a) of the agenda United Nations, New York 
http://news.flora.org/flora.mai-not/1915 
 
Follow-up to the World Summit on Social Development Statement of Information Habitat: Where Information Lives, A Non-Governmental  Organization in Special Consultative Status with the United Nations Economic and Social Council.  Information Technology, Public Participation & Global Agreements Necessity for Consultations on Virtual Enabling Frameworks and Processes to Complement and Strengthen Conventional Mechanisms for Public Participation.  

Information and communication technologies are the primary enabling mechanisms for economic globalization, a process that is very rapidly being translated into binding and legally enforceable international agreements - agreements that are being negotiated and entered into force with virtually no opportunity for public participation. As a result, the "constitution of a single global economy" - a phrase used by the Director of the World Trade Organization to describe the pending Multilateral Agreement on Investment (MAI)/1 - is being finalized in a context in which there is no framework that allows economic interests to be balanced with consideration of social - and environmental - concerns. As it stands, the Multilateral Agreement would subject local and national governmental to legal obligations to protect corporate property interests against, inter alia, hypothetical loss of profits resulting from governmental policy as well as from economic loss caused by strife or social unrest, and would over-ride incompatible local and national laws and regulations.  

There is widespread and growing concern in the non-governmental community, especially in developing countries, that the adoption of the Multilateral Agreement, in its present form, in May 1998, would lock into place a body of enforceable law that would, inter alia, undermine the implementation of the agreements of the recent series of global conferences - including the Copenhagen Declaration and the Programme of Action of the World Summit for Social Development.  
  

6) From Elisabet Sahtouris, Futurist, Systems theorist, Evolution Biologist etc. article: "Brazil and Globalization" published in Sao Paulo newspaper: http://news.flora.org/flora.mai-not/1417  

"What they can observe is a global economy designed to further benefit those who are already wealthy while less developed and poorer countries such as Brazil support the process at the expense of domestic self-sufficiency and sovereignty.  One year ago, the front page of the Wall Street Journal cheered that Brazil would finally be properly mined (now that it belonged to the World Trade Organization), though there were still "all those darn trees in the way." While being  in the mainstream of globalization may sound as though Brazil is finally coming into its own, it will actually be increasingly owned and stripped of resources by foreign business, and increasingly dependent on a global economy that is highly unstable and could drag Brazil to ruin"  
  
If Brazil supports the MAI in the upcoming vote, foreign businesses will have better than equal rights with domestic business, including the power to *fine* Brazil for any infringement on their production process, even if it violates Brazilian environmental and labor standards! This is a highly dangerous situation for the Brazilian people.  
  
Even some of the wealthiest multi-billionaire capitalists in the world now recognize the extreme danger of these economic inequities.  As Sir James Goldsmith wrote in the "London Times" of Feb. 1994, "What an astonishing thing it is to watch a civilization destroy itself because it is unable to reexamine the validity, under totally new circumstances, of an economic ideology."  And George Soros, in 1997, added "The main enemy of the open society, I believe, is no longer the communist but the capitalist threat."  

When the biggest players in the capitalist  money markets issue such warnings, we had better pay attention. To call the World Trade Organization-ruled commerce "free trade" is worse than a lie, for such labels cover up what these men warn of: a process so inequitable that it now threatens not only Brazil, but the future of all humanity."  

  

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c) Quotes from individuals and institutes whose perspectives are changing:  

"What an astonishing thing it is to watch a civilization destroy itself because it is unable to reexamine the validity, under totally new circumstances, of an economic ideology."  
- Sir James Goldsmith (financier) in the *London Times* of Feb. 1994  
  

"The main enemy of the open society, I believe, is no longer the communist but the capitalist threat."  
- George Soros , The  Atlantic Monthly, February 1997  
  

"Has Globalization Gone Too Far? " asked in a book published March 1997 by a leading advocate of increasing global economic integration)  
- Institute for International Economics   
  

In this book, Harvard economist Dani Rodrik supports globalization as a whole but recognizes that the process causes significant losses among certain sectors of the population. He criticizes the economics profession for ignoring the risks and losses associated  with globalization, and urges that governments expand social insurance programs and take other measures to protect those who are most at risk.  
  
  
"There is a phenomenal, unrelenting pressure for a single global market. Do we want it and where will we draw the line between efficiency and sovereignty?" said Sylvia Ostry, a respected and staunch advocate of free trade. "I don't know the answer to that."..."But I do know that diversity among nation states to me is a fundamental human value. "If biodiversity is fundamental then certainly diversity of cultures is fundamental," said Canada's former ambassador to the Uruguay round of trade negotiations which concluded in 1994.  
-Sylvia  Ostrey , (Canadian economist) reported in The Ottawa Citizen, 28 June 1997  

  
"Ms. Ostry's doubts are an indication that uneasiness about the trend toward cookie-cutter countries is spreading beyond nationalist, left-leaning groups.......... she said Canadians and citizens of other countries need to have more say about agreements that bind national governments to a set of global rules.  
-April Lindgren, The Ottawa Citizen, 28 June 1997-  

  

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d) Other quotes from the concerned: as compiled by the Preamble Collaborative (US based Policy Centre)  

The MAI in the Words of Framers, Proponents and Opponents: A compilation of notable quotes on the MAI.  
http://www.RTK.NET:80/preamble/mai/maihome.html  
  

"Most simply, the goal of the investment pact that emerges from review of these documents is to constrain the power of governments in host countries and in source countries to regulate investors' activities. Thus, the MAI would reduce the capacity of national and sub-national governments to limit the degree and nature of foreign investment. . . or to impose standards of behavior on investors."  
 - Public Citizen's Global Trade Watch-   
  

"We're concerned about its deregulation aspects on the environment and there's no balance in it. Corporate rights are not balanced with corporate responsibility."  
-Charles Arden-Clarke, Worldwide Fund for Nature-  
  

"If we reflected upon the economic, social and ethical ramifications of the MAI, they reveal what is perhaps its most salient feature. It challenges the right of a nation to determine its own economic, social and ethical development."  
 - Dr. Chandra Muzaffar, Director, Just World Trust-  

  
"The MAI is one of the greatest threats ever to the economic development and national sovereignty of countries of the South."  
 - Dr. Chandra Muzaffar, Director, Just World Trust-  
  
"Foreign investment in non-democratic countries can help prop up dictators. For this reason, some nations, states and cities use their laws as carrots or sticks to discourage businesses from investing in dictatorial regimes. But the MAI says that foreign companies can't be punished for investment they make in other countries. This means that we have to close our eyes to how a foreign investor acts outside of our borders, so when it comes to foreign corporations, our laws can't reflect our values."  
- Friends of the Earth-  

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