Editorial in Montreal Gazette
May 1, 1998
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Friday 1 May 1998
The Gazette
The story of how the MAI died is an instructive lesson about democracy in the Internet age. The Multilateral Agreement on Investment was supposed to become the world's first set of comprehensive rules on how foreign investment should be treated by national governments. The idea remains a sound one - that the world needs a rules-based system for investment, just as it has rules about trade.
But the MAI, negotiated in Paris among the 29 nations in the Organization for Economic Co-operation and Development, was killed by a rag-tag coalition of citizens' groups, labour unions, environmental activists and the like who spread their wildest fears about the secret negotiations on the Internet.
The jungle telegraph was so effective that trade ministers finally blinked and walked away from the table.
The negotiations were, indeed, secret. But that's how serious negotiations of any kind are conducted at the international level. Even so, the secrecy charge was rather hollow. The OECD did post draft versions of the MAI on the Internet for all to see. And critics took full advantage. Before long, they were sending each other apocalyptic E-mail messages about the how the MAI was a transnational bill of rights for multinational companies that would rob national governments of sovereignty.
Come to think of it, that's not such a disturbing notion. Think of all the awful acts committed throughout human history in the name of national sovereignty. Perhaps a little shared sovereignty wouldn't have been such a bad thing.
In any case, MAI fears have been wildly overblown.
The deal would have given foreign investors the right to seek compensation if they had been treated less favourably than domestic ones. This provision is already part of the North American Free Trade Agreement. It has hardly robbed Canada of its sovereignty, and very few companies have lodged complaints.
Still, there were some legitimate concerns about MAI over culture, the environment and social programs. These should be addressed by negotiators when talks resume, either at the OECD or through the World Trade Organization.
And they must resume. Protectionism in investment is no more defensible than protectionism in trade.
When the trade ministers get back together, they should also be talking about Web sites and E-mail and how to get their message of liberalized investment out to the wired world as effectively as their opponents.