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MAIGALOMANIA! THE MULTILATERAL AGREEMENT ON INVESTMENT MAIGALOMANIA! THE MULTILATERAL AGREEMENT ON INVESTMENT If ratified, the Multilateral Agreement on Investment will place yet more power and wealth in the hands of transnational corporations while making them even less accountable for their actions. ecrecy, haste and intrigue have characterised the negotiations around the Multilateral Agreement on Investment (MAI), the latest plan of the economic globalisation elite for dismantling barriers to investment all over the world in the quest for a progressively more open, global economy. All of the regional and global economic liberalisation pacts born in the past decade— the World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), the European Union (EU), Latin America's Mercosur and so forth—will pale in the face of the mighty MAI. "Investment is a desirable and desired thing... Nonetheless, governments still some- times find it threatening, because free direct investment limits administrations’ ability to control and shape their countries' economic destiny. This is a small price to pay for allowing private sector decision-makers to generate economic benefits worldwide. But it is a price that some governments in some sectors still find difficult to pay. That is a tragedy." (European Commissioner, Sir Leon Brittan) "The preponderance of restrictions on foreign investment lie outside the OECD area... Business needs the benefits of an international regime to include the fast-growing coun- tries of Asia, Central and Eastern Europe and Latin America."? (International Chamber of Commerce, on the MAI) CORPORATE EMPOWERMENT An analysis of the forces behind any of the recent trade and investment regimes reveals that transnational corporations (TNCs), working both nationally and in international coali- tions, are active proponents of the prying-open of markets and the removal of barriers to trade and investment. That is certainly the case in the ongoing OECD negotiations on the MAI [popularly pronounced as "my"]. A total of 477 of the world's 500 largest TNCs are based in OECD (Organization for Economic Cooperation and Development) countries, and most of these are organised in groupings like the International Chamber of Commerce (ICC), the US Council for International Business (USCIB) and the European Round Table of Industrialists (ERT). All of these corporate lobby groups have been directly or indirectly involved in the shaping of the MAI. The reason for their interest in a global investment treaty, intended as much for Third World countries as for the OECD states negotiating the agreement, can be found in the increasing percentage of corporate investment that flows in a southerly direction. Furthermore, TNCs are tightly allied with the neoliberal politicians governing most of their home countries, and generally play a considerable role in both national and, increas- ingly, international policy-making. The 1994 completion of the Uruguay Round and the creation of the World Trade Organization were a great victory for TNCs which, together with their governments, lob- bied for the removal of national barriers to the flow of goods and services. The next logical corporate challenge has been the creation of a treaty which, by disman- tling barriers to investment, would provide investors with a so-called "level playing field" across the globe. The various provisions of this Multilateral Agreement on Investment would ensure the most ideal investment conditions for transnational corporations—including homogeneous and transparent legal and regulatory frameworks, the standardisation of diverse local and national conditions and, best of all, the right to recourse when corporate profits or reputa- tions are damaged. A Briefing by Corporate Europe Observatory (CEO) © February 1998 c/- Prinseneiland 329 1013 LP Amsterdam, The Netherlands Telephone/Fax: +31 30 2364422 E-mail: ceo@xs4all.nl Website: www.xs4all.nl/~ceo/ A Briefing by APRIL - MAY 1998 NEXUS - 29