I. Some Events surrounding negotiations
II. Possible scenarios for future of negotiations
High level officials from OECD countries met in Paris on February 16 and 17 to make the political decision whether the MAI could realistically be finished in time for the current negotiating deadline, the late April 1998 OECD ministerial meeting. The results of these meetings were inconclusive. The one concrete result was that negotiators could not reach agreement on a timetable for finishing the MAI.
There are a number of paths that negotiations could take, from an acceptance of the MAI at the April ministerial meeting (followed by a 6 month extension to resolve technical issues), to a longer extension, to collapse of MAI talks. A few of the more likely scenarios are described below.
The strategy adopted by NGOs to add their public critiques to internal disagreements between governments in the hopes of delaying, complicating, and potentially killing the MAI seems to be working to an extent. Environmental and labor provisions have become and remained one of the unresolved issues holding up negotiations. In addition, new public pressure has increased the political dimension of weighing opposition and support that is part of governments’ calculations of how to try to finish the MAI.
It will be important to build on the momentum of our campaigns over the past few months and weeks. A decision on the future of negotiations now likely has been pushed off to the ministerial meeting in April. Any decision will be influenced by negotiators’ ability to work out a compromise in the next two months. We should instead try to ensure that the MAI becomes more exposed and controversial in this time period. It is also important to position ourselves to take some credit if negotiations are in the process of failing.
I. Some recent events surrounding negotiations (heavy on the involvement of the US, which we follow most closely)
* Past weeks- increased activism by NGOs & questions by parliaments, local governments and regulatory agencies
* Feb 6- Head of MAI negotiating group visits washington with message that April deadline can be reached if US wants to finish MAI.
* Feb 13- statement by US trade representative that the US could not sign the MAI in April at it stands. This is not a new position but is picked up by the press and casts doubts on the Feb 16-17 meetings before they begin.
* Feb 16- Paris protests by filmmakers and others demanding cultural exception causes French government to state it could not sign MAI as the agreement stands.
* Feb 16-17- High level meetings extend extra hours. US is reportedly isolated in opposing a completion (or at least a political declaration) by April.
* Feb 16-17- Chief US and EU negotiators reportedly meet individually
* Feb 17- Head of negotiating group Engering holds press conference, issues short statement by negotiators with commitment to completing MAI but no commitment to finishing by april. In press conference Engering mixes optimism that the MAI can be completed with statements that if agreement is not reached by April the OECD ministers could decide to abandon the MAI.
* Feb 17- Chief US negotiators hold press conference, issue statement. Their message is of continued support for MAI, willingness to extend negotiations for as long as they take, and recognition of need to sell the MAI to US public.
* Feb 16-20- The consensus of press reports is that negotiators have failed to reach agreement and that the MAI is in trouble.
* Feb 18-20- A number of ambassadors to the oecd and negotiators are reportedly recalled to brief governments on negotiations.
* Feb 19 or 20?- Canadian government declares it cannot sign MAI in April.
II. possible scenarios for future of negotiations
Here are a few possible paths that MAI negotiations could take. I don’t have special insider information This is speculation on my part, based on talks with colleagues, government officials, statements by governments, press reports and e-mail reports on what has happened. They are not arranged in order of likelihood.
1. Completion of MAI by April in time for OECD ministers to sign.
Very unlikely. Even the European countries that favor early completion reportedly no longer think this is a reachable goal. Franz Engering, the Dutch chairperson of the negotiating group, does have a personal interest in finishing by april because he will give up the chair (to the US) after April.
2. April signing of political declaration accepting results of MAI negotiations, with 6 months extension to resolve technical details and political problems, and final signing in October.
This scenario is favored by a majority of governments. The advantages from
the perspective of MAI proponents is that it would give avoid an embarrassing
failure to live up to last years ministerial mandate to finish by April 98
and would increase pressures on negotiators top compromise by October. US
negotiators, however, have described this option as not making sense because
the issues that would have to be resolved between April and October are not
minor technical issues that can be “legally scrubbed” but the core
political disputes that have held up the MAI for nearly two years. The public
‘spin’ coming out of last weeks negotiations would seem to cast
doubt on whether this april-october solution can be achieved. This being
a viable scenario depends somewhat on interpreting US statements that the
US would not sign the MAI in April
as:
A) legalistic- referring only to a full signing rather than a political
declaration;
B) designed to lull critics of the MAI, and/ or
C) posturing for negotiating leverage.
This possibility is also supported by similarities with past trade negotiations that were represented as fading but where negotiations were finished with last minute deal making. Lower level negotiators are still working under the assumption that the MAI will be substantively complete by April.
3. Longer, indefinite (undergound) extension of negotiations
This possibility is based on taking the US government statement released last week at face value. The US publicly seems to favor an extension of negotiations for as long as it takes to reach a deal. These negotiations would be carried out bilaterally or in smaller group negotiations., with the US rather than the Netherlands chairing negotiations after April. This would follow the model of the WTO’s financial services agreement, which the US refused to sign until a year’s worth of convincing other countries to move their positions and offer more liberalization. The benefit from the US point of view would be the possibility of reducing the number of reservations before signing, while lowering the political profile of the MAI for the remainder of the year. This is potentially a dangerous path for negotiations to take. While there would be more time, negotiations would be diffuse and harder to target. It is unclear if any other government would accept this option.
4. April or April-October signing of the MAI by a majority of countries with some governments refusing to sign (yet).
Again using the financial services agreement as a parallel, there could be an agreement that most but not all OECD governments would sign. The draft MAI does not require unanimity by OECD countries for the MAI to be signed or take effect, even though negotiations generally proceed by consensus. The US, Canada, France and Norway could be candidates for not signing the agreement initially. Given the polarization in negotiations, the US not signing would allow for resolution of the cultural and investment boycott issues to suit all other parties. The problem with this scenario is that if an MAI is signed that goes against the US on all major controversial issues it would be difficult for the US to join in the future, leaving an MAI without the worlds leading source and host of foreign investment.
5. Failure to reach agreement by April means the MAI is ‘dead’
This possibility is based on two assumptions,
a) that the US is serious that there must be a year or indefinite extension of negotiations and
b) that other governments will lose interest if negotiations go much past April.
While there are reasons to doubt that there are no circumstances under which the US would strike a deal this year, the argument goes that the US government is not politically committed to finishing the MAI for a combination of reasons. The US has decided that replenishing the IMF will take preference over all other international economic issues in congress this year and so does not want there to be a set date -- in April or October -- for opponents of the mai to focus on. Also, because of the large numbers of reservations and the possible addition of more environmental./ labor provisions, US businesses and hard core liberalizers in the administration have less use now for the MAI, while opposition continues to grow. I have no idea of whether other governments would actually rather let the MAI falter than negotiate for another year. Further support for this scenario is that none of the issues holding up negotiations have been resolved yet. The press spin of the past week has come close to writing the MAI off but it is unclear if this is based on good, inside information or different papers feeding odd rumors that negotiations are in trouble.