Editor’s note in 2020: MAI was defeated in October 1998 after an intense global campaign. Notably, “the international protests against the MAI were the first example of such mass-activism to deploy the Internet” (Wikipedia).

With each new global trade agreement, economic globalization is disenfranchising a larger portion of the world’s poor and middle class. From GATT (Global Agreement on Tariffs and Trade) to the WTO (World Trade Organization) to NAFTA (North American Free Trade Agreement), global accords are stacking the deck for further concentration of wealth and power. Now a new proposal for the global economy is being discussed: MAI (the Multilateral Agreement on Investment). Fortunately, concerned citizens worldwide are organizing to prevent MAI from becoming a reality. But it will be an uphill battle!

What is MAI?

MAI is a new treaty now being negotiated by the Organization for Economic Cooperation and Development (OECD) in Paris. If passed, it will give unprecedented powers to global investment bankers, money speculators, and transnational corporations. It will turn present-day regulatory processes upside-down. Instead of governments regulating corporations, MAI will regulate local, state, and national governments. It will invert the balance of power between corporations and governments. More than ever, corporations will govern the global economy.

To avoid public scrutiny, for more than two years, MAI has been planned behind closed doors. Its framers know that because it supersedes federal, state, and city governments, citizens everywhere would protest. Unquestionably, MAI will promote globalization. The dispute is over what kind of globalization. Will MAI benefit broad sectors of the population, as its proponents claim? Or will it exacerbate the problems that have emerged with economic globalization over the past 25 years, including greater income inequality, soaring unemployment, and declining living standards for most of the world’s labor force?

How MAI Strips Local Control

MAI specifies that foreign companies must be treated the same as national companies. For example, let’s say your city now favors locally owned businesses in contracts for municipal projects such as public works, roads, or school lunches. Or perhaps your country only allows local residents to own land. MAI could override all such rules.

Even non-discriminatory laws can be overridden if they limit foreign entry. For example, to protect endangered resources your government might restrict all corporations—domestic and foreign—from starting new mining or timbering operations. Foreign companies could challenge these limits, claiming they favor local companies that are already established. The effect will be to bypass laws to protect the environment.

Corporations as ‘Most Favored Nations’

Under MAI, corporations gain a status equivalent to “Most Favored Nations.” Had MAI been in force during South Africa’s apartheid system, all government sanctions and boycotts against South African investments would have been illegal. Thus MAI would eliminate one of the most effective tools for human rights and environmental activism.

MAI would enable corporations to sue governments for monetary compensation in the event that a law violates investor rights as stated by the agreement. International investors could choose to sue a country before an international tribunal rather than in the country’s domestic courts.

Thus MAI provides new rights for corporations without corresponding rights for labor or the public. It limits the ability of governments to carry out policies to promote local employment and economic development. This is, again, the kind of globalization that has contributed to increasing poverty and income inequality over the last two decades.

NGOs Make Their Case

On October 27, 1997, 47 Non-Governmental Organizations (NGOs) from 23 countries met in Paris to consult with the OECD. The NGOs argued that MAI presents big obstacles to sustainable development and to the sovereignty of nations. They explained how MAI will weaken environmental, consumer health and safety regulations around the globe, and will undercut the bargaining leverage of Third World countries against powerful multi-nationals. They protested that the exclusion of the developing nations from negotiations would bias the MAI against the needs and objectives of those countries.

These NGOs see MAI as a dangerous leap past other treaties. In the words of the OECD itself, it confers “state of the art” rights upon transnationals. Rather than to increase the rights of powerful multinational investors, what is needed is an international framework for regulating foreign investment.

The OECD has agreed to conduct a literature review of the impact of foreign investment on the environment and to review how the MAI might affect international environmental agreements. But the negotiators refused all other NGO demands. They still plan to complete the agreement before June 1998.

At their press conference the next day, NGOs announced a coalition against the MAI, and launched an international campaign to prevent adoption of the agreement.

Local Communities Fight Back

The public is slowly growing aware of the dangers of agreements such as MAI. On April 20, 1998, the Board of Supervisors of San Francisco, California, voted unanimously to oppose the MAI and “similar international accords that could restrict San Francisco’s ability to regulate within its jurisdiction, decide how to spend its procurement funds, and support local economic development.”

With this resolution, San Francisco has taken a strong position against future economic pacts that give more powers to international investors while tying the hands of local government. This pro-active stance sends free-traders and the White House a much needed reality check: what’s good for multinational corporations is not necessarily what’s best for working people, the environment and human rights. By thinking globally and acting locally, San Francisco is reclaiming some of the power usurped by corporations’ greed.

What you can do

  • First, learn as much as you can! Consult the world wide web (see below). Or send $10.00 (if you can) to HealthWrights for a packet of key information, with up-dates.

  • Help educate others so that more people are aware of this important issue.

  • Organize members of your community.

  • Work with your local government to establish MAI-free zones.

  • Contact your elected representatives and tell them what you think.

World Wide Websites with MAI Information

Friends of the Earth: http://www.foe.org/ga/mai.html

Preamble Center for Public Policy: http://www.rtk.net:80/preamble/mai/ maihome.html

Public Citizen-Global Trade Watch: www.citizen.org/pctrade/MAI/mai.html

Third World Network: www.twnside.org.sg/souths/twn/twn.htm