An international treaty which will liberalise rules on international investments the same way that GATT did on trade is drawing flak.
The Multilateral Agreement on Investment (MAI) is an international economic agreement under negotiation within the Organisation for Economic Cooperation and Development (OECD). Discussions on the MAI were initiated in 1995 and agreement was scheduled to be reached by May 1997. However, due to the delay in reaching consensus on all the provisions of the MAI, coupled with strong protests from NGOs, citizens´ groups and labour unions (especially in the OECD countries), the negotiations were first extended till April 1998 and then until October 1998 (see update Pg53).
The Agreement on Investment is designed to remove all barriers and controls on the movement of finance capital and production facilities. Backed politically by the United States and the European Union, MAI is designed on the framework of the investment provisions in the North American Free Trade Agreement (NAFTA). Unlike NAFTA, which applies only to three countries (Canada, Mexico and the US), however, the MAI would have worldwide application.
Initially, the 29 member countries of OECD – the source of 85 percent of the world´s foreign investment -would adopt the agreement, and then others would be invited to join. Since a majority of restrictions on foreign investments happen to be in the developing countries, critics argue that the MAI is intended to serve as an instrument to further open up their economies to foreign (Western) capital.