My reading on the MAI negotiations, which I have been following closely for 15 months, is that it was the last gasp of 1980s neo-liberalism. The WB has developed a modified line since the early 1990s, focusing on good governance and the important role of states, although they should be 'market-friendly' (World Development Report 1997). The MAI's strong rules on non-discrimination and investor protection were developed by specialists on investment treaties, and the negotiation was treated as free-standing at the OECD, so even the OECD's own committees on environment, taxation, etc, were not consulted until the draft treaty was pretty far advanced. When they saw the text they started to add large carve-outs and exceptions, to deal with the uncertain impact of the broad prohibitions on discrimination and 'takings' on specific regulatory regimes. The IMF largely drew up the draft articles on controls on cross-border capital transactions, which would have allowed them only as temporary measures. They would have been subject to notification and monitoring by both the IMF and the MAI parties. So this would have been a back-door method of extending the IMF's powers to approval of capital controls without the amendment to the IMF charter. As I understand it, the proposed extension of the IMF's jurisdiction to liberalisation of capital flows has been put on a back burner - now is hardly a propitious period for this idea.
Interestingly, although it seemed pretty clear to me when I talked to officials involve in the negotiations in autumn 1997 that the MAI was collapsing, the social-democratic politicians in the UK and France had not realised this, and continued to defend it against criticisms of NGOs and others. I think this shows how much they have bought into global neo-liberalism, as well as how reluctant they are to do anything which might offend business - even though the big business lobbies had largely given up on the OECD's MAI proposals as largely irrelevant to them. The French were finally forced to take their cultural lobby seriously, and carried out a thorough review of the MAI over this summer, which not surprisingly pronounced it moribund. However, the Lalumiere report proposed taking the negotiations to the WTO and aiming for a slimmed-down MAI (which the Germans had also floated at the OECD). In the UK a new Minister at the Trade & Industry department finally also recognised the MAI is dead, and is now saying that 'we need to start again with a clean piece of paper'.
It may be possible to try to take advantage of the MAI collapse to push for a broader framework which would tie in international labour, environmental, and social standards. However, it is very hard to develop international political solidarity around such demands, and without this such proposals are vulnerable to the neo-liberal critique that they are just unilateral protectionist moves by vested interests in developed countries.
> Not to thicken the plot or anything, but I was wondering what the World
> Bank's role is in the MAI (or the IMF's role for that matter--all I know
> on this is what N Chomsky writes in New Left Review 230, that the "MAI
> is now shifting to the IMF, which is suitably secretive and
> A discouraging section of the Ministerial Statement on the MAI 28 April
> 98 says: "Ministers note the increased convergence of views on the need
> for the MAI to address environmental protection and labour issues, and
> the broad support for including a strong commitment by governments *not
> to lower* environmental or labour standards in order to attract or
> retain an investment" (my emphasis)
> This, and the MAI in general, doesn't gibe with Stiglitz' remarks on
> expanding the social safety net, restricting capital inflows and such.
> Does anyone know how the World Bank is in on the MAI, shrouded in
> secrecy as it is? And why did France back out of the global NAFTA?
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