The first draft of the MAI saw the light of day in early 1997. Until this time, the agreement had been sailing along quite smoothly, with the general public and even most elected public officials oblivious to its very existence. But both the complicated reservation process and the discovery of the MAI process by the non-governmental organization (NGO) community have served to slow down, and perhaps even fundamentally disrupt the charted course of the planned agreement.

Crippling Reservations

Governments submitted their "reservations" to the MAI in February 1997, and in addition to the sheer volume of national exceptions, governments had chosen to exempt some core, open-ended areas of the agreement. In some countries, the exemption process probably involved governmental actors which had previously been uninformed about the MAI, and who were now reacting with cold feet to the far-reaching provisions of the agreement. Some of the major core exemptions proposed by member states are:

To add insult to injury, country-specific exemptions to the MAI now total a hefty 1000 pages, with some governments exempting page after page of the key sectors of their economies.27

The serious impacts upon the treaty of these far-reaching reservations, such as culture, and the daunting volume of the specific exemptions have served to unsettle the previously trouble-free MAI negotiations. A decision to postpone the deadline for the negotiations until May 1998 was taken at the May 1997 OECD Ministerial Conference, with ministers arguing that a "high standard" MAI required more time.

Public Explosion

The second, and simultaneous spanner in the MAI's works was the explosive reaction of the international NGO community after a draft text of the MAI was leaked at the beginning of 1997. Canadian and US NGOs were quick to put the draft text on their web sites, and campaigning spread like wildfire to other parts of the world. NGO strategies have included public education, lobbying of government officials and parliamentarians (many of whom first heard about the MAI from the NGO community), and in October 1997, the organization of a global NGO strategy meeting on the MAI and a simultaneous informal consultation with the OECD. The consultation/strategy session brought together representatives of development, environmental and consumer groups from over 70 countries, and resulted in a call for a major overhaul of the agreement.28

NGOs and trade unions have successfully injected two new demands into MAI negotiations -- the integration of labour and environmental standards into the agreement. For industry, these demands -- taken in conjunction with the cumbersome reservation process -- are intolerable. Recently, the OECD's Business and Industry Advisory Council (BIAC) began a new offensive after realizing that its dream MAI was on the verge of being derailed. At an official consultation between BIAC and the OECD MAI negotiating group in January this year, industrialists expressed their concerns about the direction the discussions were taking. Herman van Karnebeek, chairman of BIAC's Committee on Multinational Enterprises (as well as of chemical giant AKZO Nobel and the Dutch branch of the International Chamber of Commerce), complained that: "We now hear of disturbing signs that many of the elements we were hoping for may not be possible. What then, we are beginning to ask ourselves, is in the MAI for us?"29.

Some BIAC members, particularly annoyed at the carve-out of taxation and the introduction of labour and environment standards, went so far as to threaten that business might withdraw its support for a sub-standard MAI, which would make ratification difficult in many countries. OECD negotiators calmed BIAC members fears by asserting that liberalization remained at the top of their agenda, but that compromises were necessary in order to complete the MAI by April 1998. "Remember, this is only the first step -- like the GATT in 1947", BIAC was consoled by an OECD official. "We are entering a process of historic dimensions."30

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