Have you heard? The OECD (Organisation for Economic Cooperation and Development) has a new vision for the future. This future excludes the developing world, but will increase worldwide investment, leading to low unemployment, more wealth, and a brighter economic future for us all. The magical tool that they will use to create this New World is the Multilateral Agreement on Investment (MAI).

The Agreement will only cover the 29 developed nations of the OECD. The developing countries are excluded from the agreement and the negotiations. The reason for this exclusion is that the MAI will create an economically bipolar world. The developed countries would provide the brains, education and capital to develop, (or exploit) the developing nations.

The OECD supports the Neoliberalist philosophy that the deregulation of capital flows will lead to more investment. In turn, this will lead to greater employment and more wealth creation. However, it really is a case of the rich becoming richer while the poor developing countries become the indentured slaves of the 21st century, paying off increasing debt burdens to the developed countries. As it is brokered now, there is a distinct and conscious effort to discriminate against the poorer countries.

The MAI has one basic principle. Foreign investors must be treated no less favourably than domestic investors. Therefore an atmosphere of non-discrimination exists. Protective tariffs and quotas would be stripped back and favourable legislation towards, for example, Australian companies and workers would be nullified. In effect a 'level playing field' would be created. This would have several effects in our Australian context.

First of all, there would be an end to performance requirements by any nation. Governments could not force foreign investors to fulfil basic community requirements such as a certain percentage of local employment, the purchase of local goods and services, a certain level of domestic equity (eg Telstra), a certain level of training or a certain level of exports.

There would be greater pressure to lower wages and conditions to attract investors to each of the signatory counties. In effect, the rules of global competition that exist between countries today would change dramatically, as tax breaks, special tariff reductions and other considerations could no longer be used as bargaining tools to attract investment. Instead, wages and conditions, the environment, and other factors that we take for granted could be traded away in the competition to attract foreign investment into Australia.

The MAI also has the disadvantage of being a long-term agreement. As the treaty aims to create a stable environment for Multi-National Corporations (MNC's) to safely invest, long term profits have be protected in order to attract large capital expenditure on infrastructure. Therefore there is an initial five-year time frame in which countries can pull out of the agreement with no detrimental effects, or reduce tariffs and other obstructions to foreign investors. However, after this initial period, a country must give fifteen years notice of withdrawal from the agreement. Therefore a decision made on this treaty today, will affect our future generations, with little possibility of recourse if the agreement is bad for Australia.

If the agreement is broken by any of the signatory countries, the case is referred to an international tribunal. If the tribunal takes the shape of the North American Free Trade Agreement tribunal then Australia should be very worried. The NAFTA tribunal is a panel of three retired judges. Only a MNC can bring an issue to the tribunal, in order to reverse a decision or sue the local, state or federal government of a signatory nation for a breach of the agreement. Governments cannot sue MNC's through the tribunal. Additionally, the proceedings of the tribunal are not made public.

Certain exemptions to tariffs and domestic protection are allowed under the MAI. However, these must be specific and kept to an absolute minimum. Additionally, these exemptions are tied to a rollback timetable leading to the 'level playing field'. Once the agreement is signed, no more exemptions are to be added under any circumstances. Therefore, if member states are unaware of advances in technology by other MAI states, or if the agreement significantly undermines the Australian economy, there is no redress other than the unenviable opting out of the agreement after fifteen years. It is important to note that in those fifteen years investors would probably withdraw their capital in the expectation of capital flow restrictions, thereby worsening an already precarious economic situation. Once a nation signs the agreement they are wedded to it, for better or for worse, for richer or poorer.

How can the public then decide on the merits of the MAI? When do the people have a say in this agreement? The negotiations are carried out in secret and the Australian public has little idea of the stance of the Coalition in the discussions. The Australian media has had little to say about the MAI and has failed to inform the public of its very existence, regardless of its strengths and weaknesses.

In contrast, the Canadian government and press, having been burnt by the NAFTA Ethyl affair in 1997, have been very vocal in their opposition to the agreement. There has also been considerable attention to the MAI in the US and European press. But whichever way the cards fall, it is highly likely that the MAI will be implemented by the OECD in one form or another. What Australia has to decide is whether or not the agreement is in Australia's best interests, and not just the in the MNC's favour. Further more, what will, or in fact can Australia do if the rest of the OECD signs and Australia is left out? A new era of economic globalisation is near and there may be nothing we can do to stop it. The question is, do we want to?