The Secret MAI:
'NAFTA On Steroids'
By John Byrne Barry
The Planet
May 1998 Volume 5, Number 4
Instead of governments regulating transnational corporations, under the MAI, it would be the other way around.
Business Week calls it "the most explosive trade deal you've never heard of." Ralph Nader's Public Citizen brands it "NAFTA on steroids." And Sierra Club Executive Director Carl Pope calls it "an assault on the local," under which, theoretically, "Oscar Meyer could sue Saudi Arabia for the right to sell hot dogs in Mecca."
What inspires this poetry? And what does it have to do with protecting forests and wetlands and clean water?
It's the MAI - the Multilateral Agreement on Investment - currently being hammered out by trade negotiators from the 29 industrialized countries of the OECD (Organization for Economic Cooperation and Development) in a basement conference room in Paris. And if you haven't heard of it, you're not alone.
Whereas treaties like GATT - the General Agreement on Tariffs and Trade - made it easier to move goods and services between nations, the MAI would make it easier, cheaper and safer for foreign investors to buy tangible assets - like factories, timberland or mining rights.
It would create new rights and privileges for international investors. Proponents say they are needed to protect investors against excessive regulation.
But opponents see it as a threat to environmental and labor standards, as well as federal and state sovereignty. Instead of governments regulating transnational corporations, under the MAI it would be the other way around. It would severely restrict the rights of the nation-state to control foreign investment in its economy. The guiding principle of the MAI is that there should be no distinction between foreign and domestic investors. For environmentalists, says Dan Seligman, the Club's Responsible Trade Campaign director, the most threatening provision is the "takings" clause, under which foreign investors could sue taxpayers for compensation when any local, state or federal law hurts the corporate bottom line.
Sound far-fetched? It's already happening. Under an MAI-like provision of NAFTA, the Ethyl Corporation of Virginia has sued Canada for $251 million in compensation. Canada's crime? It banned the gasoline additive MMT, a suspected neurotoxin manufactured by Ethyl.
The MAI would extend such provisions to the 29 OECD nations, then to the rest of the world. Investors could sue governments directly in international tribunals. Decisions would be binding and final.
These rules would allow foreign investors to challenge existing land-use restrictions and reverse hard-won Club victories here in the United States. For example, says Seligman, Citifor, a wholly-owned subsidiary of the Chinese government and major timberland owner in Oregon and Washington, could sue to block salmon recovery plans affecting its lands. And Kjell Inge Rokke, a Norwegian factory-fishing operator, could sue for compensation if local authorities reject his plans to build a new city south of Washington, D.C., on Chapman's Forest in Maryland.
In February, to draw attention to the threats in the MAI, Seligman joined representatives of Public Citizen and the Preamble Center for a Seattle-to-Santa Cruz "road show," which included editorial board visits, activist trainings, "town hall" meetings, radio and TV interviews and debates with MAI advocates.
One outcome of that trip was a March 31 editorial in the San Francisco Chronicle which called for more public discussion of the MAI.
The Club also joined with the International Forum on Globalization to expose the MAI through full-page ads in The New York Times and the International Herald Tribune. At the local level, volunteers like Richard Barish of Albuquerque, N.M., are spreading the word through their chapter newsletters.
Representatives of the OECD have been secretly negotiating the MAI for the past three years. Deliberations had reached an advanced stage before a draft of the proposed treaty was leaked in January 1997. There has been virtually no participation by labor, environmental or other non-business interests and minimal media coverage.
The proposal was to be completed by May, at which point, each member nation would decide whether to ratify it. (In the United States, the Senate would have the opportunity to approve or reject, but not modify the treaty.) But citizen outcry in the United States, France, Canada and other OECD nations, combined with the U.S. Congress' rejection of fast-track trade authority last fall, have slowed negotiations.
"Alarmingly, most Americans still don't know about the MAI or the broad powers it gives corporations," says Seligman. "Our job is to change that."
To take action: Write a letter to the editor of your local paper. Say that the MAI would gut protection for the environment, labor and human rights, and that it would undermine national and local sovereignty and participatory democracy by restricting government's ability to regulate foreign investment and hold corporations accountable.
For more information: Contact Dan Seligman at (202) 675-2387 or
Or check out our Web page at You can find a draft of the MAI on the Web page of Public Citizen:

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