THE EUROPEAN UNION AND THE MAI

In addition to the 29 OECD countries, the European Commission has been represented as the 30th negotiator throughout the MAI negotiations. Although the legal status of the Commission's role is unclear, the MAI is being treated as a matter of shared responsibility between the European Commission and the member states.³⁵ In contrast, the Commission negotiates on behalf of the 15 member states in the World Trade Organization, a result of paragraph 113 in the Maastricht Treaty which gives the EU competence over a major part of the external trade policies of its member states. Although shared responsibility allows the Commission to play an influential role in the negotiations, it also means that the MAI will have to be ratified by the Council of Ministers. Overall, the Commission has played an increasingly important role in coordinating EU member state positions as the MAI negotiations have proceeded. This might be attributed to the ambitious leadership in the negotiations by Sir Leon Brittan of Directorate General 1 (External Economic Relations), a man well known for his aggressive, competitive approach to trade and investment matters.

The EU is simultaneously pushing for a mechanism for investment liberalization both within the OECD negotiations and in the World Trade Organization. As Sir Leon Brittan explains: "We need to tear down existing obstacles to investment and stop new hurdles being thrown up in its way. Nothing short of a comprehensive set of binding international rules will create the level playing field which is so vital for the European economy."³⁶

Critical, Powerless Parliament

To date, the European Parliament has been granted no formal role in the MAI negotiations nor does it have the legal right to ratify or reject the agreement. However, on its own initiative, the Parliament has brought out a resolution on the MAI which will be discussed in February and most likely voted on in March 1998. The first draft of the resolution, written by German Green MEP Kreissl-Doerfler, is highly critical of both the MAI and the negotiating process, and stresses "the fact that the negotiations have hitherto been conducted in utmost secrecy, with even the parliaments being excluded".³⁷

The draft resolution states that the MAI "reflects an imbalance between the rights and obligations of investors, guaranteeing the latter full rights and protection, while the signatory states are taking on burdensome obligations which might leave their populations unprotected". The resolution demands that binding social and environmental standards be included in the MAI, as well as a guarantee that the MAI will not lead to competition on rules in order to attract foreign investment.³⁸ In addition, the so-called Regional Economic Integration Organization (REIO) clause is a high priority for the European Parliament, which fears that the enlargement of the EU to Central and Eastern Europe, which will involve changes in legislation and future social and environmental policies at the EU level, are threatened by the MAI. These fears are mostly based on the most favoured nation and standstill clauses in the MAI.

The Parliament's draft resolution on the MAI ends by calling on "the parliaments and the governments of the Member States not to sign the MAI until a thorough analysis, accessible to the public, has been carried out of the impact of this agreement on legislation within the EU". The Commission, however, is under no obligation to fulfil this request. The European Parliament has demanded the right to ratify the agreement, but it remains unclear whether or not the Council of Ministers will heed this request.