Multilateral Agreements on Investment: Lessons from the Past and the Road Ahead

Abstract

A multilateral agreement on investment (MAI) is an agreement between sovereign states which is meant to safeguard the investments that companies undertake in foreign countries. Given the importance of foreign direct investment, one would expect to find such an agreement on the top of every international organization’s agenda. The OECD started negotiations for such agreement in 1995 and the newly established WTO set up a working group in 1996 regarding the same. At that time, however, those attempts failed. The negotiations at the OECD were suspended in 1998 and the WTO did not move beyond TRIMS, the Agreement on Trade-Related Investment Measures that is limited, to the subset of trade-related investments. The study traces the history of International Investment Agreements, along with their features, advantages and disadvantages. The paper takes at the chronology of the events which led to the failure of MAI. The analysis concludes with the road ahead for multilateral agreements on investment.