Super NAFTA

The Multilateral Agreement on Investment (MAI)

by Tony Clarke and Maude Barlow

excerpted from The Nation magazine, July 6, 1998

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For the past three years, twenty-nine leading industrialized nations have been negotiating the MAI in Paris behind closed doors at the Organization for Economic Cooperation and Development (OECD), aka the "rich nations club." From a confidential draft of the treaty leaked a year ago, we have learned a great deal about its agenda.

First, the MAI confers a quasi-nation state status on transnational corporations by:

* granting the corporations of signatory countries "most favored nation" preferential treatment for their investments;

* guaranteeing foreign-based corporations "national treatment"-meaning they will be treated not only "no less favorably" but, in effect, more favorably than domestic companies;

* giving key corporate representatives a form of diplomatic immunity to bypass a country's immigration laws;

* encouraging governments to protect the "sovereignty" of their own transnational corporations operating in other countries.

Second, the MAI contains investment rules that allow transnationals to regulate governments by:

* forbidding governments to require that transnationals meet performance requirements involving job creation, local hiring, restrictions on natural resource exports, etc.;

* restricting governments from regulating the inflows and outflows of capital, making them powerless to curb frantic speculation on financial markets, as occurred recently in Asia;

* insuring that foreign-based corporations have a competitive edge over domestic companies or community enterprises in the sale of public assets, e.g., hydroelectric utilities.

Third, the MAI gives transnationals the tools to enforce theserules by:

* compelling governments to roll back any laws, policies and programs that do not conform with MAI rules and to prevent the ./ introduction of any new "nonconforming" legislation;

* granting transnationals the power to sue governmenb for alleged violation of MAI rules and claim monetary damages through domestic courts or international arbitration panels;

* making MAI rules binding not only on the federal governments that sign the treaty but also on all state, county and city governments;

* locking in all signatory countries for at least twenty years to guarantee political stability for foreign investors.

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Multilateral Agreement on Investments