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The Multilateral Agreement on Investment (MAI) was negotiated between members of the Organisation For Economic Co-operation And Development (OECD) between 1995 and 1998 . Its purpose was to develop multilateral rules that would ensure international invesment was governed in a more systematic and uniform way between states.


BACKGROUND


International Investment has been taking place in various forms and to different degrees for over a century. There have always been rules in place, most typically through the development of Bilateral Investment Treaties (BITs), which are signed between two countries and which state the desired conditions under which investment can take place between them. The first BIT was signed in 1960 and their numbers have grown steadily since then.

However with the Collapse Of The Soviet Union in 1989 and the onset of apparent Globalisation , the number of BITs exploded during the 1990s as countries and Investors sought more Regulation for their investments. Sensing the need for more secure and stable investment conditions, the OECD drafted a copy of the MAI for negotiation between its member states, who hoped to regulate investment between themselves and eventually between themselves and non-members in a more uniform and transparent manner.


MAIN PURPOSES OF THE AGREEMENT


  • To minimise diverse state regulations in governing the conditions under which investments by foreign corporations could take place.

  • To compensate corporations for unfair or discriminatory investment conditions.

  • To allow states and corporations to sue states in international Tribunals for unfair investment conditions.



PROTESTS


However after three years of intense negotiations, members of the OECD refused to sign an agreement they felt was too radical a change in the governance of international investment. Despite similar developments in the area of trade, states were unwilling to make their governance of investment more uniform. Public protests against the agreement, including a campaign led by Lori Wallach of Public Citizen's Global Trade Watch, also were influential upon the member states' reluctance to sign, and by 1998, the OECD decided to no longer pursue the ratification of the MAI.

Some countries were disappointed with this failure and have sought to introduce a similar agreement for discussion at the World Trade Organisation (WTO), to be incorporated into the General Agreement On Trade In Services (GATS), but these efforts too have been met with significant protest.