28 APRIL 1998


At this point it is not known if the MAI is dead at the OECD. This will only become clear in late Autumn this year. If negotiations prove to be blocked in the OECD, then it will in all likelihood resurface in another forum. It is clear that divisions still exist between and within some but not all governments on the desirability of both whether to have an MAI negotiated at the OECD, and if so the form it should take. This came to a head at the Ministerial Council meeting when the previously agreed draft Ministerial statement was opened up and a debate took place not just on next steps for the negotiations, but on many aspects of the Agreement itself with some governments using it as an opportunity to stake out their positions on key issues. 

In the event a consensus was reached and Ministers decided "on a period of assessment and further consultation between the negotiating parties and with interested parts of their societies, and invite(d) the Secretary-General to assist this process". It was agreed to suspend formal meetings of the Negotiating Group until October 1998. In line with this no new deadline was set for the end of negotiations, but the negotiators were directed to "continue their work with the aim of reaching a successful and timely conclusion of the MAI". 

Informal discussions will take place between capitals on whether the key outstanding issues (deal-breakers) are solvable, for example, extraterritoriality issues. At the same time meetings of expert or working groups will take place in Paris on other outstanding issues such as labour and the environment, national level exceptions, etc.. This was hinted at by Charlene Barshefsky of the US in an OECD press conference when she suggested that governments would seek "creative solutions" to some of the outstanding issues. Subject to a consensus being found on the outstanding deal- breakers the negotiating Group would re-start its work in October. If the process breaks down at the OECD governments would possibly shift the negotiations to the WTO. 

Many governments have expressed a desire to engage trade unions and NGO's at the national level in an effort to gain their views as to what would be needed to create an MAI that meets their concerns, and to search out the "creative solutions". At the same time a public relations exercise may begin led by the OECD using its new report "The Benefits of Trade and Investment Liberalisation" to "explain" more widely the benefits of globalisation, and the role of the MAI in this. Paradoxically, in the current climate the public relations approach could have the opposite effect to that intended and stir up more opposition to the MAI. 

Lorens Schomeros (Germany) is widely thought to become the next Chair of the Negotiating Group subject to domestic considerations.   


Whatever happens to the MAI it is important that the trade union campaign continues. Governments will still be discussing important issues such as the binding labour and environment clauses. The forthcoming period of reflection, as some have called it, and the expressed desire by Ministers to "consult" with "interested parts of their societies" should rather be seen as an opportunity to press more forcibly for an MAI that we would like to see. It should also be remembered that domestic campaigns in some countries may be such that their governments would be unable to sign up to an eventual MAI in the short-term. However, the MAI could still go ahead without these countries. 

TUAC will be discussing with affiliates the next steps in the trade union campaign on the MAI, but ahead of this we would urge affiliates to engage where possible in the domestic debates on the MAI, and to seek alliances with groups that seek an MAI that balances the rights of investors with reciprocal obligations. 

On a broader level, TUAC will be exploring with the OECD how to establish an informed open debate on the broader issue of governance of the international finance and market system. 


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