LAYING THE GROUNDWORK

Talks about something resembling a MAI within the OECD were launched as long ago as in 1988, when its investment committee began working to convert existing non-binding OECD agreements -- particularly the rules concerning national treatment for foreign investors -- into binding ones. Negotiations lasted for two years, but then came to a halt. The formal reason for the discontinuation was the US refusal to give Canada an exemption on national treatment for culture; the underlying motive, however was the ambition of some negotiating parties -- particularly the United States -- to start negotiations on a more comprehensive agreement on liberalizing investment flows.¹²

Feasibility?

The next year, in 1991, the OECD Ministerial Conference ordered a study into the feasibility of a multilateral framework for investment. The work was initially carried out by two OECD working groups: the aforementioned Committee on International Investment and Multinational Enterprises (CIME) and the Committee on Capital Movements and Invisible Transactions (CMIT).¹³

This work was accelerated in 1994, when five working groups, "composed of independent governmental experts, were set up to prepare the major elements in the MAI".¹⁴ During this preparatory phase, business interests were systematically consulted. Collaboration existed not only with the OECD's Business and Industry Advisory Council (BIAC), which unites numerous business associations and has formal consultative status at the OECD , but also with individual corporate lobby groups such as the International Chamber of Commerce.

Pre-cooked MAI

At their May 1995 conference, the OECD country ministers decided to initiate negotiations on a MAI, with the goal of completing an agreement by May 1997. The OECD countries made no secret of their intentions to negotiate a treaty with the "highest standards" of protections and rights for foreign investors, only afterwards inviting non-OECD countries, mainly in the Third World, to join. The process of soliciting non-OECD members started soon afterwards, in the first of a series of ongoing negotiations with interested countries.¹⁵

NGO observers following the negotiations between the EU and the ACP countries (African, Caribbean and Pacific) about a revised Lomé Convention¹⁶ report that the EU is pressuring these former European colonies to accept the MAI as part of a new Convention.¹⁷ From the outset, the MAI was also intended to prepare the ground for a global investment treaty within the World Trade Organization (see Part 3).¹⁸

The main building blocks of the MAI as we know it -- including its all-encompassing definition of investment and the principles of national treatment, roll-back, standstill and so forth -- were in place from the start of the negotiations thanks to the four year feasibility study. Official negotiations kicked off in September 1995 in a negotiating group, chaired by Dutchman F.A. Engering, with representatives of all OECD states as well as the European Commission. The WTO was invited as an observer. Since that time, this negotiating group has met every four to six weeks, and working or drafting groups convene more frequently. Between meetings, delegates circulate texts and positions through electronic mail. ¹⁹