The main advocates of the plan, the governments of the European Union, claim it would increase foreign investment, generate jobs, and promote development.

Critics, however, argue that the boom that has already taken place in foreign investment—which reached $400 billion in 1997, double the figure for 1994—has done little to help the poor or provide employment. They point out that the 200 largest corporations responsible for most investment only employ 0.5 percent of the global work force. They also maintain that to attract corporate investment, governments have kept wages low, and social and environmental standards down. Corporations have been the real beneficiaries as they have been able to shift or expand polluting and labor-intensive production to wherever wages and standards are lowest, and natural resources cheapest to exploit.

Environmental and labor groups fear that the problems that have resulted could now increase if new measures are introduced—during the next round of WTO talks to be launched in Seattle—to increase foreign investment and expand the rights of foreign-based corporate investors to operate free from public accountability.

Even though the MAI, under negotiation at the OECD in Paris, was defeated by a coalition of activists in 1998, the European Union, with support from Japan and Canada, is pushing to include many aspects of it within the WTO. The EU, which hopes to direct the WTO to begin negotiations for an agreement on investment early in 2000, claims its proposals are different from the MAI. Companies would not, they maintain, have the automatic right to invest in all sectors of a foreign nation’s economy. Rather, countries could specify which sectors they were willing to open up to foreign corporations.

Critics, however, warn that even a diluted version of the MAI should be opposed. They believe that it will lead eventually to the opening-up of all national economic sectors to foreign investment, and impose unacceptable restrictions on public policy at national, state, provincial, county, and municipal levels.

The proposed investment agenda is likely to include the following measures:

• Expropriation Rules: banning ‘expropriation’ not only of physical assets but also of profits from planned but unrealized investments, as a result of new public policies, such as public health or environmental laws, and increases in taxation. Under NAFTA, this rule was exercised when the U.S.-based Ethyl Corporation sued Canada over its ban of a neurotoxin gasoline additive, MMT. Ethyl argued that this ban was an unfair expropriation of its profits and government attorneys believed that Canada would lose under NAFTA law and advised Canada to settle the case. Canada awarded the corporation $13 million in damages and repealed its ban on MMT.

• Performance Requirements: ending the right of governments to impose performance standards on foreign corporations, such as hiring local workers, labeling products, limiting exports of natural resources, and other environmental or social requirements.

• Investment Conditions: banning governments from discriminating against companies on the basis of their human rights or environmental records.

• National Treatment: making governments treat foreign-based corporations as if they were national or local companies. No favoring of local or minority-owned businesses in the provision of public services or in granting subsidies would be allowed; contracts and subsidies would have to be equally available to foreign-based corporations operating within their countries.

The adoption of such an agenda by the WTO is the primary goal of the EU for the Seattle Round. However, it faces determined opposition from a broad coalition of governments from developing countries. The U.S., meanwhile, is lukewarm. Facing a presidential election in less than 12 months, the White House is fearful of alienating key environmental and labor constituencies. To date, the U.S. has indicated that it is neither keen to initiate negotiations on investment, nor to oppose them. The incorporation into the WTO of an MAI-style investment agenda is therefore by no means certain, although critics warn that there is a 50 percent chance that a deal will be struck.