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December 13, 2020

Multilateral Investment Agreement Explanation

Filed under: Uncategorized — Mark Baker @ 1:46 am

The UK government seems to have a surprisingly complacent approach to the WTO. When the MAI collapsed, Trade Minister Brian Wilson seems to have understood some of the concerns expressed. He called for all new negotiations to begin with a “blank paper” based on objectives that “fully address social and environmental concerns.” Despite these commitments, the government insists that the WTO should cover foreign investment according to the same principles. This is a driving force behind the EU`s investment proposal. It thus ignores widespread opposition to the MAI and mounting evidence of the WTO`s abhorrent failings. [36] We are currently witnessing a renaissance in the debate on a Multilateral Investment Agreement (MIA). The last attempts to conclude such an agreement failed in 1998 at the Organisation for Economic Co-operation and Development (OECD) and in 2003 under the World Trade Organization`s (WTO) Doha Development Agenda. The reasons for these failures are both the opposition of emerging and developing countries to a unilateral policy aimed primarily at protecting international investors and the divergences between industrialized countries, particularly with regard to the liberalisation of market access regimes. Proponents are making several arguments for a resumption of MIA negotiations: first, we are now witnessing a fundamental change in global investment flows. Companies in emerging countries are increasingly investing abroad and are working to better protect their foreign direct investment (FDI) in developing and industrialized countries.

Traditional criticisms of influential emerging economies against the MIA appear to be softening as a result of increasing convergence of interests. Second, there is a growing consensus among industrialized countries themselves on international investment rules. The common principles of international investment adopted in 2012 by the EU and the United States, aimed at paving the way for a transatlantic trade and investment partnership, are a sign of this. This gradual convergence, particularly with regard to the introduction of market access rules, seems to have eliminated another stumbling block on the path of an MIA. Third, the increasing regionalization of investment regulation is being used as an argument that could facilitate the transition to the immediately higher multilateral level. As a result of so-called “mega-regions” – such as the Trans-Pacific Partnership between the United States and 10 other Pacific countries, the comprehensive regional economic partnership between the Association of South Asian Nations (ASEAN) and six other countries, including China or the proposed Transatlantic Trade and Investment Partnership – it is possible to consolidate the investment rules that would facilitate negotiations on a MIA. These current trends can indeed help pave the way for a comprehensive agreement. However, the main issue in the international debate should not be whether an MIA can be set up. The most important question is whether the institutional form of an MIA is likely to effectively address the most pressing challenges of the current investment regime. This is not very likely, as it is unlikely that an MIA will lead to a significant increase in FDI flows or that the interests of developing countries will be better taken into account. It is very likely that an MIA will also not result in greater cohesiveness between investment rules and other areas of action. It is more promising to meet these challenges in the context of regional cooperation, as it makes it possible to better adapt the content of the treaties to the specific needs of the participating countries.

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