ThestoryofhowtheMAIdiedisaninstructivelessonaboutdemocracyintheInternetage.TheMultilateralAgreementonInvestmentwassupposedtobecometheworld'sfirstsetofcomprehensiverulesonhowforeigninvestmentshouldbetreatedbynationalgovernments.Theidearemainsasoundone-thattheworldneedsarules-basedsystemforinvestment,justasithasrulesabouttrade.
ButtheMAI,negotiatedinParisamongthe29nationsintheOrganizationforEconomicCo-operationandDevelopment,waskilledbyarag-tagcoalitionofcitizens'groups,labourunions,environmentalactivistsandthelikewhospreadtheirwildestfearsaboutthesecretnegotiationsontheInternet.
Thejungletelegraphwassoeffectivethattradeministersfinallyblinkedandwalkedawayfromthetable.
Thenegotiationswere,indeed,secret.Butthat'showseriousnegotiationsofanykindareconductedattheinternationallevel.Evenso,thesecrecychargewasratherhollow.TheOECDdidpostdraftversionsoftheMAIontheInternetforalltosee.Andcriticstookfulladvantage.Beforelong,theyweresendingeachotherapocalypticE-mailmessagesaboutthehowtheMAIwasatransnationalbillofrightsformultinationalcompaniesthatwouldrobnationalgovernmentsofsovereignty.
Cometothinkofit,that'snotsuchadisturbingnotion.Thinkofalltheawfulactscommittedthroughouthumanhistoryinthenameofnationalsovereignty.Perhapsalittlesharedsovereigntywouldn'thavebeensuchabadthing.
Inanycase,MAIfearshavebeenwildlyoverblown.
Thedealwouldhavegivenforeigninvestorstherighttoseekcompensationiftheyhadbeentreatedlessfavourablythandomesticones.ThisprovisionisalreadypartoftheNorthAmericanFreeTradeAgreement.IthashardlyrobbedCanadaofitssovereignty,andveryfewcompanieshavelodgedcomplaints.
Still,thereweresomelegitimateconcernsaboutMAIoverculture,theenvironmentandsocialprograms.Theseshouldbeaddressedbynegotiatorswhentalksresume,eitherattheOECDorthroughtheWorldTradeOrganization.
Andtheymustresume.Protectionismininvestmentisnomoredefensiblethanprotectionismintrade.
Whenthetradeministersgetbacktogether,theyshouldalsobetalkingaboutWebsitesandE-mailandhowtogettheirmessageofliberalizedinvestmentouttothewiredworldaseffectivelyastheiropponents.
OnMondayinParis,negotiatorsfrom29countriesincludingCanadawillresumetheireffortstohammeroutaninternationalcodeofconductgoverningforeigninvestment.FewissuesaresoimportantforCanada,orsobadlymisunderstoodbytheCanadianpublic.
TheMultilateralAgreementonInvestment,orMAI,hasbeenunderdiscussionsince1995.Itaimstoprovidetheworld'sfirstcomprehensivesetofrulesonhowforeigninvestorsaretreatedbynationalgovernments.Ifthe29nationsintheOrganizationforEconomicCooperationandDevelopmentareabletoreachadeal,theMAIcouldlaterbeextendedtoincludethe130countriesintheWorldTradeOrganization.
AndyettheMAIhasbeentreatedlikeaflesh-eatingdiseaseinCanada.IthassparkedsomuchfearandsuspicionthatmanyCanadiansnowbelieveitwoulddespoiltheenvironment,robaboriginalpeopleoftheirrights,preventgovernmentregulationofthetobaccoindustry,destroyfarmmarketingboards,bankruptsocialprogramsandendCanadiancultureasweknowit.
OK,that'sanexaggeration.Butintelligentdebatehasbeenveryhardtofindonthissubject.Forthat,theLiberalgovernmentisasmuchtoblameasthewell-organizedopponentsofthetheMAIinthelabourmovementandontheCouncilofCanadians.Ottawahasdoneapatheticjobofbuildingsupportforaninternationalinvestmenttreatyandexplainingwhyweneedone.
ThesuccessfulpropagandacampaignbeingwagedagainsttheMAIhasconvincedmanyCanadiansthatournationalsovereigntywouldbeatriskandthatfacelessinternationalcorporationswouldhavemorepowersthangovernments.Inreality,alltheMAIreallyintendstodoisensurethatforeigninvestorsaretreatednolessfavourablythandomesticones.Therealprinciplehereisfairness.
Inaglobaleconomy,fairtreatmentofforeigninvestorsmattersmorethanever.Since1973,foreigndirectinvestmentaroundtheglobehasgrownby14timestoover$350billionayear.InCanada,afederalstudyshowsthatforevery$1billionofforeigninvestment,45,000newjobsarecreated.Onejobin10nowdependsonforeigncapital.
Abroad,Canadiansarejustasactive.Foreverydollarofforeignmoneyinvestedhere,Canadianshaveinvested94centsabroad.Withmorethan$171billionontheline,Canadiancompaniesexpecttobetreatedfairlyinothercountries.Takeexpropriation,forexample.IfaCanadianminingcompanywithavaluablepropertysuddenlyfindsittakenoverbyaforeigngovernment"inthenationalinterest,"thenitshouldbefullycompensated.
LabourgroupsandenvironmentalistsopposetheMAI.ButwhatifanothercountrydeliberatelylowereditsenvironmentalandlabourstandardsinordertolurejobsandcompaniesawayfromCanada?Whatwouldtheysaythen?Indeed,oneofthegoalsoftheMAIistomakesurethatcountriesdon'tlowertheirstandardstostealinvestment.
Yes,thereareconcernsabouttheMAI.CanadaisrightlyanxioustolimittheU.S.abilitytoimposeitsdomesticlawsonforeigncompaniesoperatinginCuba,asithasdoneundertheHelms-BurtonAct.Therearealsolegitimatefearsthatbecauseforeigncompanieswouldhavetherighttoappearbeforeadispute-settlementpaneliftheyfeelwrongedbyanationalgovernment,theywouldthenhaverightsandprivilegesthatdomesticcompanieswouldn't.
Clearly,thereismoretoughbargainingaheadinParis.Butaslongasnegotiatorskeeptheprinciplesoffairnessandequaltreatmentinmind,theMAIiswellworththeeffort.
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©1996DavidT.Nicholson