The facts about the

Multilateral Agreement on Investment (MAI)

from the Friends Of the Earth internet website

Proponents of free trade and globalization have turned their sights to the next target for liberalization and deregulation--foreign investment. Recognizing that foreign investment has become the main force behind economic integration, multinational corporations and industrialized countries are advocating a Multilateral Agreement on Investment (MAI). The MAI -- which is being negotiated at the Organization for Economic Cooperation and Development (OECD) --would 'open' all sectors of countries' economies, strip nations and localities of their right to differentiate between local and foreign companies, and let corporations directly challenge our laws.

ELEMENTS of the Multilateral Agreement on Investment (MAI)

The OECD MAI will:

1. OPEN ALL SECTORS of nations' economies to foreign companies.

2. Require countries, including states and localities, to TREAT FOREIGN INVESTORS THE SAME AS LOCAL COMPANIES

3. BAN PERFORMANCE REQUIREMENTS. Some states and localities require companies who get public money to hire locally or pay a living wage. These type of accountability measures may be struck down by an MAI.

4. SET BINDING DISPUTE SETTLEMENT RULES. The MAI allows investors to directly challenge laws and seek monetary damages.

CONCERNS- What's Wrong with the MAI?

1. CLOSED SECRETIVE NEGOTIATIONS. The MAI has been negotiated with little public or congressional input. The wide range of concerns raised by international capital mobility- sustainability, labor right, financial stability-have largely been ignored.

2. OPENS DEVELOPING COUNTRIES. OECD members are the source of 85% and destination of 65% of foreign investment, but increasing amounts of money go to developing countries. OECD countries will pressure developing nations to join the MAI, an agreement they had no role in drafting.

3. PREEMPTION OF LOCAL, STATE & NATIONAL LAWS. The US may have to change some laws to join the MAI. Then foreign companies can use the MAI dispute system to challenge laws that affect their investments.

4. ALL RIGHTS, NO RESPONSIBILITY. Corporate investors get new rights, but there are no mechanisms to hold them accountable to the social and environmental concerns of the countries they came from, or the countries they invest in.

5. EFFECTS ON SUSTAINABILITY. The MAI will contain weak, non-binding environmental provisions. Meanwhile, the agreement will let corporations go everywhere and buy everything, allowing us to temporarily live beyond our ecological limits and worsening an already inequitable distribution of resources.

IT'S ALL ABOUT CAPITAL MOBILITY...

What does an agreement on foreign investment really do? It guarantees un-restricted capital mobility- the right of big companies and financial institutions to go where they want, leave on their own terms, and therefore play one country against another for the most favorable 'climate' for investment leading to a downwards spiral of labor and environmental standards.

WHAT SHOULD BE DONE?

1. Slow negotiations down to allow Congress and citizens to have some input.

2. Study potential impacts of the agreement, including undertaking an environmental impact assessment.

3. Maintain nations' democratic right to protect the environment, health, workers and small businesses.

4. Balance corporate rights with obligations. Require investors to follow the stronger of home or host country environmental and labor standards.

5. Any agreement without such safeguards should be defeated. This investment agreement must protect the public interest, not just the narrow needs of transnational capital.

Multilateral Agreement on Investments