Sydney Morning Herald Editorial Speaks Out on MAI ..... June 8 1998
WHEN a treaty like the Multilateral Agreement on Investment (MAI) is opposed by the hard Right, the hard Left, the soft Right and the soft Left and by distinguished former judges it is clearly under considerable pressure. Given the range of this opposition, it is incumbent on the Federal Government to present the community with strong and convincing arguments for the MAI. But according to the Federal Parliament's joint standing committee on treaties, to which the MAI was referred by the Foreign Minister, Mr Downer, this has not been done. The consequence of this is that a treaty that has the potential to help the Australian economy might be lost through the lack of proper and adequate explanation.
The MAI has been in the process of negotiation for three years between the 29 OECD nations. The principle the MAI is trying to establish is worthwhile, namely that foreign investors in OECD nations, including Australia, should be treated no differently from domestic investors. However, the various government departments have failed to justify the benefits the MAI might bring to Australia. The committee has heard what it called "flimsy" submissions on the MAI from Treasury and Foreign Affairs and Trade officials. It was scathing about the refusal to make a submission by the Industry Minister, Mr Moore: "The committee view this as an inadequate response, particularly as administrative arrangements list investment promotion as part of the portfolio."
Given the nature of the committee's interim comments, it is already quite clear that unless the quality of the argument in favour of MAI improves substantially, the Federal Government should not sign the treaty in October. The committee's chairman, a Queensland Liberal, Mr Bill Taylor, has told the Federal Parliament: "At this early stage of the inquiry, we remain to be convinced that the MAI is in Australia's national interests."
The OECD, which is promoting the MAI, has complained about the "misinformation" that is corrupting the debate about the treaty. There is an important consideration in this complaint. It is always easy - unfortunately - to demonise changes by exploiting a fear of the unknown, especially when these changes seem to affect important interests. A scare campaign, as Australians have seen with the GST debate or the argument over, say, the implications of the Closer Economic Relations treaty for Australian television quotas, often suppresses the reality of what will really happen when the change is introduced.
But on the evidence and facts that have emerged so far, it has become clear that the campaign against the MAI has some merit. Even proponents of the MAI concede that there are issues that still need resolving before the treaty is signed. For example, the chief executive of the Australian Chamber of Commerce, Mr Mark Paterson (a supporter of the MAI), has acknowledged that among his concerns are the location of the negotiations in the OECD rather than the World Trade Organisation: the efforts to insert clauses on the environment and labour standards; the extra-territorial application of laws; taxation issues; and "the vexed question" of the exceptions being sought by the various national governments.
The fact that these serious problems with the MAI are being aired publicly before the treaty is signed indicates the success of the joint standing committee on treaties process. Secret treaty-making, like the Keating Government's treaty with Indonesia, is not in the public interest. Neither is the silence of the bureaucrats on proposed treaties. The Reserve Bank Governor, Mr Ian Macfarlane, has issued a timely reminder of the challenge posed to the Australian economy by the Asian financial meltdown. If only indirectly, this should underscore the fact that more needs to be done to sell the benefits of the MAI.