In May 1995, the OECD began negotiations on a Multilateral Agreement on Investment (MAI). The US, eager to avoid interference from poor countries, considered the OECD Council a "safe" body since only rich countries are members of the organization. Secret negotiations took place from 1995 until 1997 when an OECD source leaked a copy of the draft agreement to a Canadian citizen group. The leak revealed that the MAI sought to establish a new body of universal investment laws that would guarantee corporations unconditional rights to buy, sell and do financial operations all over the world, without any regard for national laws and citizens' rights. The draft gave corporations a right to sue governments if national health, labor or environment legislation threatened their interests. However, the negotiations failed in 1998 when first France, and then other countries, successively withdrew after pressure from a global movement of NGOs, citizens groups and governments of poor countries. MAI opponents saw the agreement as a threat to national sovereignty and democracy and argued that it would lead to a "race to the bottom" in environmental and labor standards. The failure of the MAI negotiations proved a success for the global movement against the MAI. However, rich governments continue to push for similar investment provisions in regional trade agreements and the World Trade Organization (WTO). At the WTO Ministerial in Cancun in September 2003, the richer WTO members tried to introduce a Multilateral Investment Agreement (MIA) through the "Singapore" issues. These efforts failed again, however, as a group of more than twenty poor countries united in demanding a fairer trade deal. This page follows the MAI and other related initiatives on international investment.
Key Documents
The former director of UNCTAD's Trade Program criticizes the Multilateral Investment Agreement (MIA) and evaluates the drawbacks and benefits of foreign direct investment. The MIA will protect foreign investors and limit the ability of developing countries to manage FDI. (WTroubleO)
Professor Ha-Joon Chang notes that today's richest countries never pursued policies to blindly attract foreign investment, which they now pressure poor countries to adopt under the proposed WTO Multilateral Investment Agreement. (Third World Network)
Articles on the Multilateral Investment Agreement (MIA) in the WTO
Rich countries that benefited from protectionist investment regimes in the past now seek liberalization through the WTO's Multilateral Investment Agreement. This article says an investment agreement will obstruct poor countries' development of their domestic economies. (Inter Press Service)
Citizen protest killed the OECD Multilateral Agreement on Investments in 1998, so now rich countries turn to the WTO to shape investment rules that they contend will spur the flow of global capital. But poor countries need basic public goods before enlarged private sector investment. (Toronto Star)
The European Commission lobbies for a WTO-Multilateral Investment Agreement to advance European corporate interests in foreign markets. Narrow agendas negotiated before Cancun undermine opportunities for civic action and open-ended dialogue with poor member countries at the WTO. (Investment Watch)
Rich countries want the WTO to protect investors' rights, but leading NGOs argue that such a move would weaken the ability of poor countries to protect their workers and the natural environment. (One World)
Action Aid argues that the European Union and Japan, the major proponents of an investment agreement at the WTO, do not aim at helping poor countries but at securing improved conditions and greater protection for their own multinationals.
In this briefing paper, the World Development Movement and Friends of the Earth explode some of the myths surrounding foreign direct investment and the "benefits" of an investment agreement in the WTO.
Articles on the Multilateral Agreement on Investment (MAI) in the OECD
The Preamble Center for Public Policy gives a summary of the proposed Multilateral Agreement on Investment, and presents the sharply contrasting views of supporters and opponents.
Norway opposes MAI in WTO: "The Government meets the demands of the free trade sceptics and says a clear no to negotiations on a global investment treaty."
Seattle, the host city of the up-coming WTO Ministerial, declared itself an MAI Free-Zone by unanimous vote in the City Council. Press Release, text of City Council's Resolution and links to further information.
Noam Chomsky, in Le Monde Diplomatique, charts major international finance developments since Bretton Woods.
An in depth essay from the Earth Island Journal arguing against the MAI as a potentially dangerous alliance between arms and corporations.
Normura International found guilty of illegal trading, but, contrary to the exclamations of MAI's pundits, further boundaries on trading strategies need to be established to protect stable economies worldwide. (Sydney Morning Herald)
A Canadian perspective about the MAI and its implications. (The Toronto Star)
An article by Martin Khor, Third World Network.
A detailed article on the MAI by Nuri Albala. (Le Monde diplomatique)
The role of the OECD in the negotiations on the Multilateral Agreement on Investment. (Le Monde diplomatique)
Background analysis and explanation of how MAI fits into the neoliberal agenda.
Article from Alternatives which looks at the MAI and how various unlikely partners have united to oppose it.
Provides citizens' alternatives and further information.
A helpful guide for a better understanding of international treaties.
Article from Preamble Center on the different positions towards the MAI.
Article by Andrea Durbin of Friends of the Earth, sharply critical of the MAI, an investment agreement being negotiated under the auspices of the OECD.
A commentary on the Multilateral Agreement on Investment from the Preamble Center for Public Policy.
An article from the Washington Postby Fred Hiatt, who discusses activity in the Maryland state legislature.
A further commentary by Friends of the Earth.
IMF change of bylaws gives it unprecedented power over national capital controls. (Friends of the Earth)
This site provides documents and progress reports on MAI up to 1998. A table of contents outlines the topics included in MAI discussion by OECD members. OECD no longer tracks the progress of the MAI.
An international organization of delegates and experts funded by 30 developed countries. OECD provides nations and multi-lateral financial institutions with policy deliberations and statistics based on its scientific and economic research of globalization issues.
The United Nations Commission on Human Rights on human rights as a necessary objective of trade, investment and financial policy.
Fact sheet from Friends of the Earth critical on this controversial proposal by the OECD.
