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The Multilateral Agreement on Investment (MAI) was negotiated between members of the Organisation for Economic Co-operation and Development (OECD) between 1995 and 1998. Its purpose was to develop multilateral rules that would ensure international investment was governed in a more systematic and uniform way between states. When it was leaked to the public it met with intense scepticism, as the rules in the agreement looked to undermine the sovereign power of the Nations that were in negotiation. Image File history File links Wiki_letter_w. ... The Organisation for Economic Co-operation and Development (OECD) is an international organisation of those developed countries that accept the principles of representative democracy and a free market economy. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ...

Background

International investment has been taking place in various forms and to different degrees for over a century. There have always been rules in place, most typically through the development of Bilateral Investment Treaties (BITs), which are signed between two countries and which state the desired conditions under which investment can take place between them. The first BIT was signed in 1960 and their numbers have grown steadily since then. Invest redirects here. ... A Bilateral Investment Treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in the state of the other. ... Year 1960 (MCMLX) was a leap year starting on Friday (the link is to a full 1960 calendar). ...

However with the collapse of the Soviet Union in 1989 and the onset of apparent globalisation, the number of BITs exploded during the 1990s as countries and investors sought more regulation for their investments. Sensing the need for more secure and stable investment conditions, the OECD drafted a copy of the MAI for negotiation between its member states, who hoped to regulate investment between themselves and eventually between themselves and non-members in a more uniform and transparent manner. The rise of Gorbachev Although reform stalled between 1964–1982, the generational shift gave new momentum for reform. ... 1989 (MCMLXXXIX) was a common year starting on Sunday of the Gregorian calendar. ... Globalization is a term used to describe the changes in societies and the world economy that are the result of dramatically increased trade and cultural exchange. ... Investment is a term with several closely related meanings in finance and economics. ...

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. As a result, the deal collapsed.

Main purposes of the Agreement

• To minimise diverse state regulations in governing the conditions under which investments by foreign corporations could take place.
• To compensate corporations for unfair or discriminatory investment conditions.
• To allow states and corporations to sue states in international tribunals for unfair investment conditions.

A tribunal is a generic term for any body acting judicially, whether or not it is called a tribunal in its title. ...

Protests

However after three years of intense negotiations, members of the OECD refused to sign an agreement they felt was too radical a change in the governance of international investment. Despite similar developments in the area of trade, states were unwilling to make their governance of investment more uniform. Public protests against the agreement, including a campaign led by Lori Wallach of Public Citizen's Global Trade Watch, also were influential upon the member states' reluctance to sign, and by 1998, the OECD decided to no longer pursue the ratification of the MAI. Global Trade Watch was created in 1995 as a division of the U.S.-based NGO Public Citizen that monitors the WTO and other trade agreements such as NAFTA and CAFTA. Like Public Citizen in general, GTW advocates for a greater public role in international, federal, state and local policy... Public Citizen is a U.S. non-governmental organization, founded by Ralph Nader in 1971 and based in Washington, DC. Its activities span across a diverse range of issues, including energy policy, trade policy, campaign finance reform and accountability, consumer protection, medical malpractice, and public health. ... Global Trade Watch was created in 1995 as a division of the U.S.-based NGO Public Citizen that monitors the WTO and other trade agreements such as NAFTA and CAFTA. Like Public Citizen in general, GTW advocates for a greater public role in international, federal, state and local policy...

"The most effective opposition to the MAI was launched by a wide-ranging coalition of civil society NGOs. These NGOs argued that the MAI would threaten protection of human rights, labor and environmental standards, and Least Developed Countries. A particular concern was that the MAI would result in a race to the bottom among countries willing to lower their labor and environmental standards to attract foreign investment. A crucial turning point occurred when in February 1997 Ralph Nader's Public Citizen acquired a copy of a OECD draft MAI agreement and put it on the internet. Using a variety of websites, NGOs mobilized a strong and diverse opposition composed of human rights groups, labor and environmental groups, and consumer advocates."^[1][2]  Least Developed Countries Least Developed Countries (LDCs) are countries which according to the United Nations exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. ... Ralph Nader Ralph Nader (born February 27, 1934) is an American attorney and political activist. ... Public Citizen is a U.S. non-governmental organization, founded by Ralph Nader in 1971 and based in Washington, DC. Its activities span across a diverse range of issues, including energy policy, trade policy, campaign finance reform and accountability, consumer protection, medical malpractice, and public health. ...

Some countries were disappointed with this failure and have sought to introduce a similar agreement for discussion at the World Trade Organisation (WTO), to be incorporated into the General Agreement on Trade in Services (GATS), but these efforts too have been met with significant protest. For other uses of the initials WTO, see WTO (disambiguation). ... The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations. ...

Notes

External links

• Multilateral Agreement on Investment. Retrieved on 2006-10-27. Nine media articles on the MAI.