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Abstract: Negotiations for the Multilateral Agreement on Investment (MAI) began in 1993, at the Organization for Economic Cooperation and Development (OECD). Despite initial expectations, the talks failed to produce an agreement. The MAI negotiations were undercut by 600 organizations in 70 countries, all expressing vehement disapproval of the proposed treaty. While this well-organized campaign played a role in the demise of the MAI effort, it was only part of the story. Many observers attribute the failure to difficulties that arose during the talks. Negotiators had substantive disagreements about what the treaty should achieve, and their governments were often unready or unable to make the necessary commitments.
Learning Objective: This case prompts a number of questions: How, and why, did this negotiation unfold at the OECD? Who gains and loses from foreign direct investment? What impact does international investment have on developing countries? Should international trade agreements cover foreign direct investment? Are investment agreements even necessary?