Written Answers. - Multilateral Agreement on Investments.
Richard Bruton
Question:
80
Mr. R. Bruton
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the likely impact of the multilateral agreement on investments on Irish policy discretion; and the stage negotiations on the ratification of this agreement have reached.
[3790/98]
The multilateral agreement on investment, known as the MAI, is being negotiated under the auspices of the Organisation for Economic Co-operation and Development, the OECD, in Paris. It will be a free standing international treaty open to all countries willing and able to meet its obligations. Negotiations are due to be completed this year.
Countries which become party to the MAI will commit themselves to treat foreign investors no less favourably than they treat their own investors. They will also agree not to discriminate among investors of different MAI parties. Other important provisions will include the following: transparency of laws and regulations; the right to transfer funds to and from the host country, although governments will be able to suspend this right temporarily in the event of a balance of payments or monetary crisis; the right of the investor to bring key personnel to the host country, subject to general immigration laws; the prohibition of certain performance requirements such as minimum export targets, as a condition for allowing an investment to be set up; and the right of a foreign investor to adequate and effective compensation in the event of the expropriation of property.
All these provisions will be underpinned by a dispute resolution system, both between states and between the investor and the host state. Where countries are willing and able to implement the main thrust of the MAI but have difficulties with specific obligations, they will have the opportunity to negotiate country-specific exceptions.
The Government supports the conclusion of the MAI and expects that this country will, in due course, become a party to it. This would allow us to give yet another important signal to foreign investors that they are welcome here. We already treat foreign investors favourably and would not, therefore, need to make fundamental changes in order to honour our commitments.
The agreement would also be of value to our outward investors in that it would allow them to compete on a level playing field in the markets of those countries which choose to become party to the MAI. They would also benefit from the assurance that they can repatriate their profits here, employ Irish managers and specialised technicians and have a right of fair and adequate compensation if their property in another MAI country were ever expropriated.
I am aware that criticisms of this proposed agreement have been voiced by some development agencies because of concerns that it would have a negative effect on developing countries. While all OECD countries are expected to sign the agreement, there is no similar expectation in the case of non-OECD countries. All countries willing and able to meet the obligations of the MAI will be welcome to sign the agreement, but no-one will be obliged to do so. If a particular country decided to sign the MAI, it would increase its attractiveness as a destination for foreign direct investment. However, it would be for every country to decide for itself whether the balance of advantage lay in signing the agreement.
