Background on the MAI

How and When the MAI Started:

In May 1995 the MAI negotiations began at the Organization for Economic Cooperation and Development (OECD), a Paris-based organization comprised of 29 mainly developed countries.

The MAI would be the first binding international agreement negotiated by the OECD - traditionally a research arm for the finance ministers of member countries.

MAI Based on NAFTA Model

The MAI is similar to NAFTA's provisions on investment (Chapter 11). Like NAFTA, the MAI:

  • Grants National Treatment and Most Favored Nation status to investors requiring all countries be treated alike (e.g. had South Africa been an OECD member under the MAI, sanctions to end apartheid would have been forbidden) and local and foreign investors be treated exactly the same.

  • Provides direct Investor-to-State Dispute Resolution whereby foreign investors and corporations can directly sue governments if they suspect a violation of the agreement. MAI would apply this extraordinary right to enforce all MAI terms, whereas NAFTA allows private standing only for narrow circumstances. Several
    companies have already won judgements against governments with awards of tens of millions as of late 2001 and many more cases are pending.
  • Protects investors from loss of profit due to expropriation including both direct or indirect expropriation and measures "tantamount to"expropriation. The MAI's language, which covers measures having "equivalent effect" to expropriation, appears to broaden NAFTA's language even further. In the case with Ethyl, the corporation filed suit against the Canadian parliament on the grounds that mere legislative debate of MMT-related risks constituted a measure "tantamount to" expropriation.

  • Prohibits certain "performance requirements", or conditions for investment (e.g. the federal Community Reinvestment Act).

MAI Based on GATT/ WTO

The MAI broadens the GATT/WTO limitations on national sovereignty in favor of one set of global rules enforced by an unaccountable international tribunal.

The OECD Goal Was to Complete MAI By 1998

U.S. officials negotiating the MAI have indicated that fast-track is the means by which they intend to push the MAI through Congress.

The MAI would be a powerfully enforced consolidation of the OECD non-binding investment guidelines, the strongest provisions of NAFTA and GATT and the strongest features of various bilateral, regional and sectoral investment agreements.

The proposed MAI would be a free standing agreement open to accession by any non-OECD member country. Imagine NAFTA-style investment and dispute resolution terms applied to the whole world.