OECD Member States & MAI

Organization For Economic Cooperation and Development (OECD) member states are negotiating a Multilateral Agreement on Investment (MAI) with a tentative target date of May 1998 for completion of the negotiations ("A multilateral," 1996). The proposed MAI will be open to all OECD member states and will be open to accession by non-member states. The proposed MAI, if ratified and implemented, will be the first multilateral treaty providing what its proponents refer to as high standards for the liberalization and protection of international investment, and for effectively settling disputes associated with such investment.

The proposed OECD-based MAI is assessed in this study. The findings of the research performed are presented in discussions dealing with (1) the need for an OECD-based MAI, (2) barriers to negotiating an OECD-based MAI, (3) the structure required for an effective OECD-based MAI, (4) the implications of the implementation of an OECD-based MAI, and (5) the prospects for the ratification of an OECD-based MAI.

The Need for A Multilateral Agreement on Investment

A widely accepted premise is that firms expand to foreign markets in order to exploit the monopoly they possess over rent-yielding advantages such as economies of scale, and superior product and process technologies

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generation and in particular for the developing world. The definition and scope of an international agreement on investment is crucial. This key global issue and needs to involve all stakeholders, including developing countries, Countries in Transition (CIT), and civil society. The proposed MAI, as currently drafted, has restrictions only on the ability of governments to control foreign investment. This approach could severely constrain domestic environmental management. As proposed, the MAI would have no obligations on international standards for transnational corporations. While some OECD governments wish to finalize the proposed MAI under the auspices of the OECD, other OECD governments are interested in transferring the negotiations to the WTO. There are several different consequences of having the agreement under either. In both cases, however, the proposed MAI can be: 1. negotiated without full participation by all governments; 2. negotiated without full participation by the civil society; and 3. confirmed without reference to the principles on investment and sustainable development. Discussions about the proposed MAI are forging a new vision for a new global economic order. These initiatives are being spo
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Approximate Word count = 9681
Approximate Pages = 39 (250 words per page)

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