Multilateral Agreement On Foreign Investment

One of the main objectives of the MAI is to prevent governments from seeking to discriminate against foreign investors on the basis of their nationality (subject, of course, to the exceptions contained in the annex that each country takes to differentiate it by nationality in sensitive sectors). This will not affect their ability to maintain, establish or impose labour or environmental standards, regardless of their level of application. Indeed, the countries negotiating the MAI are currently considering provisions to strengthen their commitment to maintaining strong labour and environmental standards and to prevent some from lowering its standards in order to attract investment. Answer: No; While some investors may try to find “Regime Hop” to find the lowest regulatory standards, investment studies suggest that this is not a significant factor influencing investor decisions. Industrialised countries have been successfully competing for years to invest in the other country`s markets, and in those countries we have seen an increase, not a decline in environmental, consumption and labour standards. The beginning of opposition to the MAI can be attributed to a few individuals who remained leaders in its subsequent development. Until the end of 1996, Martin Khor, director of the network of the third world network based in Malaysia, received a document prepared for the OECD ministerial meeting in May 1995 as well as for the future negotiations of the European Commission at the WTO (European Communities Commission, 1995: A Level Playing Field for Direct Investment World Wide, 1 March, Brussels). The document shows that Mr Khor understood that multilateral investment negotiations, that his organisation could be part of a grand coalition that opposed the WTO, could be under way within the OECD. He briefed some NGO colleagues, including Tony Clarke, director of the Polaris Institute in Canada. “Performance requirements” generally distort the trading and investment decisions that an investor would otherwise make in an open market.

This is why the MAI is negotiating a provision limiting the use of certain listed performance requirements. Such provisions are not unusual. In fact, the text being negotiated sounds like the language of NAFTA. Restrictions on the use of performance requirements are the norm in U.S. bilateral investment agreements. They are also included in the Trade-Related Investment Measures Agreement, negotiated under the Uruguay Round WTO Agreements. Nothing in the MAI will affect or hinder the ability of the United States or a state or locality to sue foreign investors in our courts in the event of a violation of federal, national or local law. Answer: With OECD members having a common goal and a common timetable for achieving a high-quality investment agreement, the OECD is currently the forum in which all members are ready to negotiate a multilateral agreement.

In order not to limit the negotiations to OECD members, the MAI negotiating group has an active information programme to inform interested countries of the progress and content of the negotiations. The UK government seems to have a surprisingly complacent approach to the WTO. When the MAI collapsed, Trade Minister Brian Wilson seems to have understood some of the concerns expressed. He called for all new negotiations to begin with a “blank paper” based on objectives that “fully address social and environmental concerns.” Despite these commitments, the government insists that the WTO should cover foreign investment according to the same principles.