The Multilateral Agreement on Investment (MAI) currently being negotiated amongst the OECD countries has the xenophobes -- on the right and left -- in a state of high anxiety.
To them the MAI is the "grand conspiracy". It is a treaty negotiated in secret by faceless men in Switzerland which will override national sovereignty and open the economy and the environment to unfettered exploitation by multinational corporations.
This is, however, a grand delusion.
An efficient, fair and predictable set of rules governing foreign investment is needed, and very much in Australia's interest.
Australia is major player in the global capital markets. Direct foreign investment into Australia is essential for domestic growth, jobs and rising living standards. Australian firms are increasingly investing offshore and Australia has the potential to play a much bigger role as a global financial centre.
Trade and investment flows are interdependent and to achieve the benefits of trade liberalisation, investment barriers must be addressed as comprehensively as trade barriers. Otherwise countries will use investment barriers as a substitute for trade barriers.
The Uruguay Round failed to achieve this and, as a result, foreign investment transactions amongst OECD countries, continue to be governed by an inconsistent and incomplete patchwork of over 1,600 bilateral treaties.
The MAI seeks to address this by giving investors greater protection against expropriation and other arbitrary acts, establishes legally binding procedures for settlement of disputes and creates an uniform set of rules. It does not seek to give foreign investors special rights or override national legislation. Under it, foreign investors will be subject to all domestic laws, including laws governing the environment, industrial relations and taxation.
The MAI allows each country to nominate areas to be exempt from the agreement. And the Howard Government has indicated that all areas, including floats of public corporations, which currently receive special treatment will continue to do so under a MAI.
It is true that for far too long, international treaties have been negotiated and agreed to by Federal Cabinet without adequate public or parliamentary scrutiny. Ironically this process has been strongly promoted by many of the left-wing opponents of MAI.
However, this has not been the case for the MAI.
The MAI has been subject to an open and thorough public debate. The OECD has disseminated over 620 articles, reports and documents on the issue. All countries, including Australia have published fact sheets and position papers. Over 3000 articles covering every aspect of the subject can be obtained free in any public library via the Internet. The Australian media -- particularly the ABC -- has been a-buzz on the issue.
Importantly, the Howard Government has already referred a draft of the MAI to the parliamentary Joint Standing Committee on Treaties. This committee has called for public submissions and an interim report is due by 24 May. The Government has also stated that if a MAI is signed, it will be resubmitted to the joint Parliamentary committee for another review -- including public submissions -- prior to ratification by Parliament.
Due process and the national interest is driving Australia's participation in the MAI, not the international brotherhood.
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