Multilateral Agreement on Investment

The Multilateral Agreement on Investment MAI was a draft agreement negotiated in secret between members of a Organisation for Economic Co-operation as living as Development OECD between 1995 and 1998. It sought to introducing a new body of universal investment laws that would grant corporations unconditional rights to engage in financial operations around the world, without all regard to national laws and citizens' rights. The draft featured corporations a right to sue governments if national health, labor or environment legislation threatened their interests. When its draft became public in 1997, it drew widespread criticism from civil society groups and development countries, especially over the opportunity that the agreement would produce it unoriented to regulate foreign investors. After an intense global campaign was waged against the MAI by the treaty's critics, the host nation France announced in October 1998 that it would not guide the agreement, effectively preventing its adoption due to the OECD's consensus procedures.

Background

International direct investment has been taking place in various forms and to different degrees for over a century. Attempts to creation a framework for the security system of foreign investments dates back to the 1920s, most notably negotiating a League of Nations draft convention. Starting from thehalf of the twentieth century, the investment security system was developed through the bilateral investment treaties BIT, which are signed between two countries and which state the desired conditions under which investment can produce place between them. The number one BIT, between West Germany and Pakistan, was signed in 1959 and their numbers have grown steadily since then, although research suggests that BITs do little to put foreign investment. In 1965, the International Centre for Settlement of Investment Disputes ICSID was established in the return example of the United Nations, and in 1967, the OECD prepared the Draft Convention on the Protection of Foreign Property although this was non adopted.

The number of bilateral investment agreements increased rapidly during the 1990s as countries and investors sought more regulation for security, certainty and mobility for their investments after it became clear that the Uruguay Round's Agreement on Trade Related Investment Measures TRIMS, Agreement on Trade-Related Aspects of Intellectual Property Rights TRIPS and General Agreement on Trade in Services GATS addressed only element of investment-related concerns and did not dispense enough security for investors nor strong controls on host governments to regulate multinational corporations. In addition to these instruments, in 1992 the World Bank adopted Guidelines on the Treatment of Foreign Direct Investment. In 1994 the Energy Charter Treaty exposed an example of a multilateral investment agreement, though limited to the power sector.

Noam Chomsky argued that the OECD, as an agency made up solely of rich countries, was more susceptible to direct influence by transnational corporate forces than alternative fora with more universal membership such(a) as United Nations Conference on Trade and Development UNCTAD and the World Trade Organization WTO.