The Multilateral Agreement on Investment: Basic Facts
Prepared by Preamble Collaborative
What is the Multilateral Agreement on Investment (MAI)?
The MAI is a new international economic agreement being negotiated at the Organization for Economic Cooperation and Development (OECD). The MAI is designed to make it easier for individual and corporate investors to move assets - whether money or production facilities - across international borders. The MAI would take the investment provisions of the NAFTA, amplify these provisions, and apply them world-wide.
What is the status of the MAI?
Confidential negotiations have been underway since May 1995 within the OECD and are now at an advanced stage. The agreement was originally scheduled to be completed by May 26, 1997, but the deadline is being extended for one year. When complete, the MAI will be presented to the U.S. Congress and to other OECD countries for approval. Developing nations will also be encouraged to join. Despite the importance of the agreement and the advanced state of negotiations, few outside of government and international business circles are aware of the MAI.
What would the MAI do?
Countries that sign the MAI will be required to:
Proponents of the MAI claim that the agreement will provide needed protections for U.S. and other international investors against discrimination and expropriation, open new markets to U.S. investors on favorable terms and help businesses, consumers and workers in the long-run by improving the efficiency of the global economy. The most prominent non-governmental proponents are business groups, including the U.S. Council for International Business, the National Association of Manufacturers and the European-American Chamber of Commerce.
Opponents of the MAI argue that the proposed agreement will accelerate an economic and environmental "race to the bottom" as countries feel new pressure to compete for increasingly mobile investment capital by lowering wages and environmental safeguards. Opponents also claim that the MAI will allow investors to challenge legitimate regulatory safeguards that enjoy widespread public support but are viewed by investors as impediments to the free flow of capital. The public is just beginning to learn about the MAI, but there is already substantial concern about the agreement from a number of environmental, labor, consumer, and women's organizations.
The MAI was originally named the Multilateral Investment Agreement (MIA). It was originally negotiated at the World Trade Organization (WTO) at a meeting in Singapore. The WTO represents approximately 180 countries in the world, not just the rich ones. The MAI negotiations were moved from the WTO to the Organization for Economic Cooperation and Development (OECD) based in Paris when some of the WTO countries strongly objected to the MAI.
The MAI continues to be negotiated at the OECD. The OECD represents 29 of the richest countries in the world which house 95% of the top 500 transnational corporations in the world. The countries are United States of America, Canada, France, Germany, England, Japan, Austria, Australia, Belgium, Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Italy, Korea, Luxumburg, Mexico, New Zealand, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey.
The negotiations at the OECD are conducted by the Chief Executive Officers or other senior representatives from the corporations, and unelected officials from the Nation states who meet regularly. The Ministers for International trade for the representative countries attend in Paris at the OECD once a year, in April, to be briefed on the status of negotiations and to make some decision about those negotiations, including accepting the terms negotiated.
The MAI was originally intended to be accepted at the OECD level in May 1997 and then to be passed in the WTO in 1998. The May 1997 deadline at the OECD was not met. The MAI is now scheduled to be passed at the OECD level on April 27,1998.
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