MAI

From The Matrix

[edit] Multilateral Agreement on Investment (MAI)

The MAI is a proposed multilateral international agreement currently under negotiation at the Organization for Economic Cooperation and Development (OECD). If passed, the MAI will have a profound impact on the way governments treat foreign investment in all of the 30 developed country-members of the OECD. The MAI would strip nations and localities of their right to differentiate between local and foreign companies and let corporations directly challenge laws.

OECD MEMBER COUNTRIES: Twenty countries originally signed the Convention on the Organization for Economic Co-operation and Development on 14 December 1960. Since then a further ten countries have become members of the Organization. The Member countries of the Organization are:

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea (South), Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

The MAI was based on the investment provisions of NAFTA, but deals only with investment issues. The term "investment" is broadly defined in the MAI. It includes every kind of asset owned or controlled, directly or indirectly, by an investor. The MAI treatment obligation applies to all government measures (including subsidies programs and other "advantages" provided by the government). This is a significant expansion of the national treatment requirement in NAFTA.

"The MAI, and now its clones, would threaten nearly every public sector of national economies such as health care, education, and culture, government spending for the military weapons development and production, and direct support for weapons corporations are excluded from the liberalizing demands of such an agreement.

NAFTA mechanisms, as well as the WTO, IMF, and World Bank are totally undemocratic, with no access by the people. They are run by the nations with the greatest wealth, the U.S. in the first place-with the corporations and banks pulling the strings...

So it is clear that the new world order of the free market promises further erosion of the U.N., more wars, destruction of sovereignty, elimination of social programs for the people, increasing poverty and joblessness, and the demise of democracy." Covert Action Quarterly Fall/Winter 1999.

ELEMENTS of the Multilateral Agreement on Investment (MAI)

The OECD MAI will:

1. Open all sectors of nations' economies to foreign companies.

2. Require countries, including states and localities, to treat foreign investors the same as local companies.

3. Ban performance requirements. Some states and localities require companies who get public money to hire locally or pay a living wage. These type of accountability measures may be struck down by an MAI.

4. Set binding dispute settlement rules. The MAI allows investors to directly challenge laws and seek monetary damages.

CONCERNS - What's Wrong with the MAI?

1. Closed secret negotiations. The MAI has been negotiated with little public or congressional input. The wide range of concerns raised by international capital mobility- sustainability, labor right, financial stability-have largely been ignored.

2. Opens developing countries. OECD members are the source of 85% and destination of 65% of foreign investment, but increasing amounts of money go to developing countries. OECD countries will pressure developing nations to join the MAI, an agreement they had no role in drafting.

3. Preemption of local, state and national laws. The US may have to change some laws to join the MAI. Then foreign companies can use the MAI dispute system to challenge laws that affect their investments.

4. All rights, no responsibility. Corporate investors get new rights, but there are no mechanisms to hold them accountable to the social and environmental concerns of the countries they came from, or the countries they invest in.

5. Effects on sustainability. The MAI will contain weak, non-binding environmental provisions. Meanwhile, the agreement will let corporations go everywhere and buy everything, allowing us to temporarily live beyond our ecological limits and worsening an already inequitable distribution of resources.

IT'S ALL ABOUT CAPITAL MOBILITY.

What does an agreement on foreign investment really do? It guarantees un-restricted capital mobility- the right of big companies and financial institutions to go where they want, leave on their own terms, and therefore play one country against another for the most favorable 'climate' for investment leading to a downwards spiral of labor and environmental standards.

WHAT SHOULD BE DONE?

1. Slow negotiations down to allow Congress and citizens to have some input.

2. Study potential impacts of the agreement, including undertaking an environmental impact assessment.

3. Maintain nations' democratic right to protect the environment, health, workers and small businesses.

4. Balance corporate rights with obligations. Require investors to follow the stronger of home or host country environmental and labor standards.

5. Any agreement without such safeguards should be defeated. This investment agreement must protect the public interest, not just the narrow needs of multinational corporations.

Recommended Reading:

The International Law on Foreign Investment, by M. Sornarajah, published August 2004, ISBN: 0521545560

Sources:

CovertAction Quarterly, Fall / Winter, 1999, p37, 1500 Massachusetts Ave, NW, # 732, Washington, DC 20005, http://www.covertactionquarterly.org/

Friends of the Earth, 26-28 Underwood Street London http://www.foe.co.uk/

Organisation for Economic Co-operation and Development, 2, rue André Pascal F-75775 Paris Cedex 16 France http://www.oecd.org/