The Multilateral Agreement on Investment (MAI) was a draft treaty aimed at establishing a comprehensive framework for international investment. The agreement was negotiated between 1995 and 1998 by the Organisation for Economic Co-operation and Development (OECD), with the goal of promoting liberalization and protection of foreign investment. The MAI was intended to provide a set of rules and guidelines for the treatment of foreign investors and investments, with the objective of increasing economic cooperation and reducing barriers to investment.
Background and Negotiations
The idea of a multilateral agreement on investment emerged in the early 1990s, as the world economy was becoming increasingly globalized. The OECD, which consists of 38 member countries, took the lead in promoting the concept of a multilateral investment agreement. The negotiations began in 1995, with the participation of OECD member countries, as well as several non-member countries. The draft agreement was designed to cover a wide range of issues, including national treatment, most-favored-nation treatment, and investment protection. The negotiations were intense and complex, involving multiple rounds of discussions and consultations with stakeholders.
Key Provisions
The draft MAI included several key provisions, aimed at promoting liberalization and protection of foreign investment. These provisions included:
- National treatment: requiring host countries to treat foreign investors no less favorably than domestic investors
- Most-favored-nation treatment: requiring host countries to extend to foreign investors the same treatment as that accorded to investors from any other country
- Investment protection: providing protection for foreign investors against expropriation, nationalization, and other forms of interference with their investments
- Dispute settlement: establishing a mechanism for resolving disputes between investors and host countries
| Country | Investment Regime |
|---|---|
| United States | National treatment, most-favored-nation treatment |
| European Union | National treatment, most-favored-nation treatment, investment protection |
| Japan | National treatment, most-favored-nation treatment, investment protection |
Controversies and Criticisms
Despite its potential benefits, the MAI was also subject to controversy and criticism. Some of the key concerns included:
Lack of transparency: critics argued that the negotiations were not sufficiently transparent, and that the draft agreement was not adequately consulted with stakeholders. Environmental and social concerns: some critics argued that the MAI would undermine environmental and social regulations, by allowing investors to challenge host country laws and policies. Imbalance of power: others argued that the MAI would create an imbalance of power between investors and host countries, by giving investors too much leverage and influence.
Outcome and Legacy
In 1998, the negotiations on the MAI were suspended, due to opposition from several countries and civil society groups. The draft agreement was never finalized, and the MAI was eventually abandoned. Despite its failure, the MAI had a significant impact on the development of international investment law. The agreement’s provisions and concepts have influenced subsequent investment treaties and agreements, and continue to shape the debate on international investment policy.
What were the main objectives of the Multilateral Agreement on Investment?
+The main objectives of the MAI were to promote liberalization and protection of foreign investment, by establishing a comprehensive framework for international investment. The agreement aimed to provide a set of rules and guidelines for the treatment of foreign investors and investments, with the objective of increasing economic cooperation and reducing barriers to investment.
Why was the MAI controversial?
+The MAI was controversial due to concerns about its potential impact on environmental and social regulations, as well as its potential to create an imbalance of power between investors and host countries. Critics also argued that the negotiations were not sufficiently transparent, and that the draft agreement was not adequately consulted with stakeholders.
In conclusion, the Multilateral Agreement on Investment was a significant attempt to establish a comprehensive framework for international investment. Although the agreement was never finalized, its provisions and concepts continue to influence the development of international investment law. The MAI’s legacy serves as a reminder of the complexities and challenges involved in promoting liberalization and protection of foreign investment, and highlights the need for careful consideration of the potential impacts of investment agreements on host countries and their stakeholders.
