The Multilateral Agreement on Investment ( )

Right now the 29 richest countries in the world are in Paris quietly negotiating the Multilateral Agreement on Investment (MAI).

This proposed treaty extends the free trade provisions of the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA) by prohibiting signatory nations from impeding the free flow of money and production facilities from one country to another. The treaty, in effect, subordinates the right of elected governments to set national economic policy to the right of transnational corporations and investors to conduct business-investing and divesting-however they see fit.

That sounds scary enough, but how would this international agreement affect your community?

First of all, under the MAI, international companies would be treated no differently than domestic ones. That means municipal governments could not favour local companies over international firms when awarding contracts.

Secondly, the treaty would prevent governments from requiring foreign companies to purchase goods and services locally, supply local markets, or maintain a given level of employment or production.

And thirdly, the MAI would stop municipalities from passing by-laws that limit the use of property by foreign companies. In other words, the MAI makes the definition of expropriation so broad that limits on the use of property may constitute expropriation and force local governments to compensate the owners.

More than that, the MAI would go far beyond NAFTA to allow transnational corporations to vie for control of our municipal services such as refuse collection, water and sewer services and public housing.

Under the MAI, once a government contracted out a public service, it would have to follow the rules for privatization. All municipal government service contracts that required local hiring and content could be challenged for violating the MAI restrictions on performance requirements.

To avoid costly legal bills, municipal governments might be inclined to give preference to foreign companies over local ones. And once a service is privatized, a municipal government would be unable to reclaim it as a public service in better economic times without incurring penalties.

It would also be impossible, under the MAI, to introduce a new public service that would conflict with the disciplines of the MAI.
Take child care, for example. If a future federal government were to establish and deliver a publicly funded child care program through community-based non-profit facilities, it could be stopped in its tracks. Under the MAI, delivery of public services through non-profit agencies is considered a subsidy to the private sector and therefore subject to the national treatment rules. As long as there are transnational companies that make a business out of providing child care services, the new MAI would allow them to demand equal access to government subsidies.

Under the MAI, municipal leaders would be powerless to influence investment decisions that might benefit their communities. Right now, they can offer incentives to companies to locate in their town or city. That would be ruled as an unfair subsidy unless they offer the same incentive to foreign companies. This could create undue hardship on local firms and put a chill on regional development.

And the argument often used by local politicians that we need the MAI to attract foreign investment so that we can increase jobs and economic growth, holds no water.

There is no evidence that multinational corporations are holding back investment in Canada because of the lack of an investment agreement.

Foreign investors will come to Canada because we have quality infrastructure, natural resources, skilled workers and an attractive quality of life. We don't need the MAI to attract investment.