Multilateral Agreement on Investment
WDM campaigned on the Multilateral Agreement on Investment (MAI) between 1998 and 1999.
Governments of the Organisation for Economic Cooperation and Development (OECD), a club of 29 rich countries, started negotiations on the Multilateral Agreement on Investment (MAI) in May 1995. The MAI was to have been the world’s first investment treaty. It would have introduced new rights for foreign investors to invest wherever they saw opportunities, while restricting the powers of governments to prohibit access, attach conditions on investors or regulate in the public interest.
The MAI would have prevented developing country governments from adopting policies used by all OECD countries and the emerging economies during their development, such as South Korea’s requirements for foreign investors to form joint ventures, license technology and use local suppliers.
Details of the MAI became publicly known in February 1997 when a draft of the text was leaked and posted on the Internet. WDM played a leading role in the campaign, undertaking research on the likely impact of the MAI on developing countries, building a coalition in the UK and EU, and working with international partners.
After a powerful civil society campaign the MAI was defeated. The French government was the first to pull out in October 1998, followed by the UK government, which vowed to abandon further negotiations and start with a "blank sheet of paper".
However, within months it became clear that the "blank sheet of paper" had World Trade Organisation (WTO) written all over it. The British government and the European Commission (EC) mounted strong political pressure for an agreement with similar objectives upon the WTO. At the Seattle WTO Ministerial in November 1999, developing country governments resisted the EC’s attempts to include investment in a new round of trade negotiations. The EC exerted even more pressure in the preparations for the Qatar ministerial conference in November 2001.
The OECD was clearly the wrong forum to negotiate a balanced agreement that would prohibit monopolies, ensure that multinationals pay taxes, stop unfair competition and ensure companies abide by internationally agreed standards on labour, the environment and human rights. But so is the WTO. It has a mandate for trade liberalisation, not for balanced rules on investment.