by Marion & Allan Hunt Badiner
- Business Week calls it "the most explosive trade deal you've ever
heard of," and says that it would "rewrite the rules of foreign
ownership, affecting everything from factories to real estate and even
securities. But most lawmakers have never heard of the MAI."
- It is an obvious and irrefutable fact that we live in an age of globalization,
so why is the Multilateral Agreement on Investments a treaty of unprecedented
secrecy? It was not until the spring of 1997, two years after OECD (Organization
for Economic Cooperation and Development) began negotiations in Paris that
a draft copy was leaked to the press. Much to the chagrin of the multinationals,
the full text of MAI is now posted on the Public Citizen website.
- The MAI treaty is being hammered out by 29 of the richest nations who
comprise the OECD, which develops policies used to control the flow of
capital investment. The U.S. is represented by the State Dept., Treasury,
Office of the Trade Representative and such groups as the U.S. Council
for International Business, (the principal lobby arm of major corporations).
Until spring 1997, only a handful of people from the participating countries
knew anything about the MAI discussions at OECD.
- The implications of MAI are enormous. It is the logical next step after
GATT and NAFTA for transnationals to gain more control of world capital.
The document contains a body of rules for governments to follow to promote
investment. Environmental laws, labor laws and restrictions, local businesses
and local culture are all effected negatively by MAI. If adopted, it will
threaten local purchasing preferences, recycled content procurement policies,
small business set-asides, community reinvestment laws, currency and stock
trading speed bumps, investment restrictions based on human rights and
environmental performance, and more. For instance, New York City's recent
ordinance banning the sale of woods from endangered tropical rainforests
would run afoul of MAI's interdiction of performance requirements. The
MAI would drastically curtail every country's ability to regulate foreign
- In the words of the Director General of The World Trade Association
(WTO), "MAI is the constitution for a single global economy."
Actually WTO has had questions about the treaty (like that it may strip
nations of their tools for sovereignty and could become an instrument for
re-colonization), so corporations and their cohorts are using the economic
clout of the OECD to rush the finalization of the agreement.
- Some of the new corporate power tools under MAI include:
- 1. Legal Standing: The transnational's legal standing is effectively
- equal to nation states. They are granted "most favored nation"
- status. The objective was to eliminate discrimination against foreign
- investors. Governments cannot regulate capital coming in or going out.
- 2. Performance Ban: Under MAI, governments are forbidden to impose
- performance requirements. The restrictions go beyond NAFTA and WTO
- bans. Governments cannot discriminate against foreign investment
- based on human rights, environmental or political practice.
- Governments cannot set performance requirements for local hiring
- quotas, joint ventures with local firms etc. Local, Regional and
- Federal gov'ts cannot offer any preferential treatment to their own
- citizens or reward companies that have responsible environmental
- records, progressive hiring practices or even programs that strengthen
- local communities.
- 3. Expropriation: The MAI is based on what is known as the "takings
- rule" regarding compensation for expropriation. Governments are
- prohibited from taking private property "without adequate compensation"
- and "valid public purpose." Even lost profits from a planned
- investment would be considered expropriation requiring compensation.
- We are seeing this played out right now in Canada with Ethyl
- Corporation and the Canadian banning of MMT, a fuel additive that is
- suspected neurotoxin. MAI dictates that the gov't would have to pay
- "equivalent to fair market value....without delay." Unlike
- specifically exempts certain MEA's (multilateral environmental
- agreements), nothing in the MAI or the WTO recognizes their authority;
- Furthermore, the rules of national treatment and "most favored
- also prohibit the enforcement of these protocols.
- The greatest environmental threat posed by MAI is the investor-state
dispute procedure under which any new laws to protect the environment,
labor rules or consumer protections could be considered expropriation.
- If profits are hurt, the corporation has the right to sue for compensation
before an international tribunal of unelected trade bureaucrats. This right
is not available to domestic firms competing against them. This puts an
inevitable chill on state and federal efforts to rein in corporations concerned
only with profit and not the social or ecological impact of their practices.
- MAI negotiators have proposed several ways to address the environment
in the agreement: there will be statements of good intent in the preamble,
and the OECD guidelines on corporate behavior will be attached. These measures
are non-binding and totally inadequate to protect natural resources and
economic safeguards for local enterprise.
- This agreement exalts business interests over all competing social
concerns and insulates them from any attempt to balance them with other
priorities, like ecological and social reform. It does this through processes
that are remote from democratic accountability. It offers rights to capital
that even people don't have: if you travel abroad you must obey local laws--not
so investment capital under MAI. If a community or state fought hard and
persisted with social or environmental regulations, the Federal government
might have to fork over taxpayer dollars to compensate the jilted corporations.
MAI will reverse the present day regulatory process: instead of regulating
corporations, the MAI will regulate governments. In its essence, MAI is
an attack on the local, and puts into place the mechanisms for global corporations
to dominate local communities. It is a slow motion coup d' etat against
- Imagine Hollywood running the Canadian Broadcasting System, or Bundesbank
operating American Airlines, or Mitsubishi running Yellowstone Park or
the U.S. Postal system. All this and more becomes possible under MAI. Negotiations
are now in their final stages in Paris. This would be a good time to let
your representatives in Washington know if you think ratification of MAI
is bad idea.
- (Based on materials from the International Forum on Globalization,
including the new book, "MAI and the Threat to American Freedom,"
by Maude Barlow and Tony Clarke, and an article in YES by Gil Friend &
Assoc.) --March '98
- for more info, see: