By Julian Petley


The national press barely mentions it. It rarely crops up on radio or television. Yet since the middle of the decade it has been under discussion at the highest international levels and, were anything like it to come about, it would have massive consequences not simply for global trade, the trade in media products most emphatically included, but for our everyday lives.

It is the Multilateral Agreement on Investment (MAI) the latest, and most significant, of a long line of initiatives designed to “liberalise” world markets, and transfer crucial decision-making affecting people’s daily existence away from the public arena and into the hands of private, secretive, unaccountable corporate bodies. Its seeds were sown during the GATT Uruguay Round negotiations in the 1980s, which gave rise to the World Trade Organisation (WTO). By 1995, however, the poorer members of the WTO, which represents 180 countries in all, were beginning to see the downside of the proposed Agreement, leaving the WTO unable to proceed with any further discussions. Negotiations then switched to the Organisation for Economic Co-operation and Development (OECD) representing 29 of the world’s wealthiest countries, which house 95% of the top 500 transnational corporations; inevitably, this rich man’s club is dedicated to the “liberalisation” of world trade and the free movement of capital across borders. By January 1997, consensus had been reached on the basic purpose, structure and provisions of the MAI, and a confidential draft of it had been completed. The Agreement was originally scheduled to be completed on May 26 1997. All of this took place in conditions of almost total secrecy.

What the plotters and schemers of the OECD were in effect working out was a set of rules which would both severely limit the ability of any country’s government to restrict the amount of foreign investment coming into that country, and also weaken any form of national regulation over both foreign and domestic corporations that do business within a nation’s boundaries. In short, what the OECD was proposing was to amplify the investment provisions of the highly controversial North American Free Trade Agreement, and to apply them on the global scale. Thus, in the eyes of the MAI cabal, a “level” playing field would be secured for international investors, and the security of their investments would be protected in countries that signed up to the Agreement. In brief, these countries would be required to:

• open every economic sector, including manufacturing, the media and even natural resources, to foreign ownership

• treat foreign investors no less favourably than domestic firms

• remove laws that require foreign investors to meet certain conditions if they want to establish an enterprise in a particular locale, or if they want to be eligible for tax incentives or other government aid (for example, low-interest development loans)  

• remove restrictions on the movement of capital

• compensate foreign investors in full when their assets are expropriated, either through seizure or governmental actions “tantamount to expropriation”; these could include “unreasonable” regulations which incur costs for foreign investors

• accept that private investors and corporations may, before an international tribunal, sue national governments and seek financial compensation if a law, practice or policy violates investor rights as established in the MAI.

What these proposals all too clearly amount to is nothing less than a Corporations’ Charter and a recipe for an all-out economic and environmental “race to the bottom”, with countries desperately competing for ultra-mobile investment capital by lowering wages and working conditions, weakening environmental safeguards, and dismantling regulatory regimes of all kinds. In short, the terms of the MAI pose a considerable threat to countries’ national sovereignty by severely restricting the ability of individual governments to shape investment policy so as to promote their own social, cultural, economic and environmental goals. Indeed, the MAI would outlaw even a measure as moderate as Labour’s “New Deal”! Nothing could illustrate more clearly the warning delivered over 200 years ago by James Madison, one of the founders of the US Constitution, that: “stockjobbers will become the pretorian band of the government – at once its tools and its tyrant; bribed by its largesses, and overawing it by its clamors and combinations.”

Given the contents of the MAI it’s no wonder that the OECD was working under a “veil of secrecy”, the term used by the former Chief Justice of Australia’s High Court, Sir Anthony Mason, to condemn his own government’s complicity in this sinister affair. But there again, as the Harvard political scientist Samuel Huntingdon put it so candidly in his 1981 book American Politics: “The architects of power in the United States must create a force that can be felt but not seen. Power remains strong when it remains in the dark; exposed to the sunlight it begins to evaporate.”

The consequences of the MAI’s general provisions can be illustrated by looking specifically at their potential impact on the European audiovisual sector. In this respect, the agreement has to be seen as the natural successor to the American onslaught on Télévision sans frontières (in which, sad to say, it was dismally aided and abetted by the UK) and its fury at France’s success in excluding the audio-visual sector from the final GATT agreement (for which the French were thanked by the North American-owned press in Britain by being caricatured as the Gallic awkward squad).


In general terms, MAI would mean that any forms of state aid for the European audiovisual sector – such as Media II, EURIMAGES, the National Lottery film fund, and the various measures which the French have wisely put in place to protect their film industry – would have either to be opened up to all-comers (and you can guess who’d be first, not to mention second, third and nth. in line) or else run the risk of being declared illegal. Indeed, it’s even possible that the MAI could endanger the very existence of public service broadcasting in Europe, much to the delight of Murdoch, Berlusconi and other commercial competitors, of course. Thus the Agreement would negate the very purpose of any support schemes designed specifically to help the European media, and hence European cultural diversity, to survive in the face of American competition so overwhelming and aggressive that, in 1995, Europe laboured under an audiovisual trade deficit of a staggering $6.3 billion with the US. And remember that, as Vertigo has never tired of pointing out, the audiovisual sector is America’s largest exporter after its aerospace industry. It is indeed hard to see how such a measure is even remotely compatible with Article 151 of the European Union Consolidated Treaties, 1997, which places a legal obligation on the EU to “take cultural aspects into account in its action under the provisions of this Treaty, in particular in order to respect and to promote the diversity of cultures.”

Moreover, the MAI also barges into the delicate and vexed question of intellectual property rights. As Carole Tongue, Labour MEP for London East, official spokesperson for the European Socialist Group on media and culture, and a former deputy leader of the European Labour party, puts it in her invaluable booklet, Culture or Monoculture? The European Audiovisual Challenge: “Compared with the US, continental Europe has a long tradition of authors’ rights, extending beyond the narrow economic concept of copyright to a broader definition of the moral ownership of a creative work. This is not accounted for in the MAI. By assimilating intellectual property rights into a mere aspect of investment regulation, the MAI takes an extremely minimalist, economic approach to the whole idea of intellectual property.”

Furthermore, inclusion of these issues in such a crude fashion within the MAI raises the problem of its compatibility with the agreements already existing within this area, such as the Conventions of Berne and Rome, and the World International Property Organisation (WIPO) negotiations concluded in December 1996.

The European institutions have actually mounted a staunch defence of European audiovisual policy against the MAI threat unlike their last-minute rush to exclude culture from GATT.

The European Commission, normally rather too easily seduced by the siren voices of neo-liberalism, has consistently argued for the audiovisual sector and intellectual property to be excluded from the agreement, whilst the European Parliament distinguished itself by being the first Parliament within the OECD to prepare a formal (and highly critical) report on the MAI which stated forthrightly that: “Nothing should endanger the freedom of the European Union to promote and support cultural and linguistic diversity.” Even the British, now freed from the Tory Europhobic yoke, seem at long last to have abandoned their traditional role as the Trojan horse for US media interests. Or have they? Consider the following.

In March 1998 it was revealed that Tony Blair had gained and passed on to Rupert Murdoch, at the tycoon’s request, information from the Italian prime minister, Romano Prodi, on the likely domestic political reaction to NewsCorp’s renewed bid to buy a 50.6% stake in Berlusconi’s Mediaset empire, two earlier bids having come to nothing. Having thus discovered that, quite understandably, the Italians would prefer an Italian buyer, and that the rules which sensibly ban non-EU citizens and firms from owning more than 25% of an Italian television channel were not simply going to be waived, Thatcher-style, at his behest, Murdoch bid less than Berlusconi required and the deal collapsed. Now, it could be argued that Blair was hoping that if Murdoch was enabled to expand his media empire into continental Europe he might moderate his papers’ venomous Europhobia. Or alternatively, as his official spokesman Alastair Campbell put it when the story first broke, Blair “would have no difficulty in speaking Prime Minister to Prime Minister in seeking to defend and promote the interests of British companies.” The trouble with this, however, is that Murdoch is not British but an Australian-turned-American; BSkyB may nominally be a British company, but its biggest shareholder is Murdoch’s Australian vehicle NewsCorp, and it is broadcast by a satellite company based in Luxembourg; and finally, as the Economist has recently revealed, despite making £1.387 billion in profits in Britain since 1988, Murdoch has effectively avoided paying any corporation tax at all to the British exchequer. Not surprisingly, our EU partners are doing their utmost to stop Murdoch getting a foothold in their media, which is why Blair’s overture to Prodi seems distinctly non-communautaire, to put it politely.

Secondly, when in October last year the final list of Labour MEP candidates for London was published, Carole Tongue came in only fifth position, far enough down the list to be in real danger of losing her seat. As a formidable and tireless proponent of increased public investment in European media, and especially public service broadcasting, she has earned the deep enmity of the Murdoch camp. A crucial figure here is the thoroughly creepy and sinister Murdoch lobbyist and confidential agent Irwin Stelzer, who has a global brief for government relations, and is also the director of regulatory (read deregulatory) studies at the right-wing think tank the American Enterprise Institute for Public Policy Research. Stelzer not only directly “manages” the all-important relationship between News Corporation and Downing Street via regular (though extremely discreet) conversations with Blair himself, but has also been “handling” the European Commissioner for Competition, Karel van Miert, the man who was able to make or break Murdoch’s continental ambitions for digital TV. And when it comes to battles over the European Convergence Green Paper, which calls for the removal of allegedly anti-competitive practices in broadcasting, Stelzer and the rest of the Murdoch lobbying machine are remorselessly hammering home the argument that, if it’s unfair for states to subsidise coal, steel or airlines, then it’s equally unfair for them to subsidise public service broadcasters too. And up against him, all the time, is Carole Tongue, whose future as an MEP is now looking uncertain. Is this just a coincidence? It’s hard to say. All one can add is that the process whereby party officials selected Labour’s candidates, and placed them in order on the all-important lists, was so lacking in transparency and credibility that it only encourages conspiracy theories to flourish.

That the European Commission and Parliament, as well as the governments of individual European states, took a stand against GATT is largely a tribute to the incredibly impressive campaign of lobbying against it by over 600 non-governmental organisations (NGOs) a campaign in which the World Wide Web played an absolutely crucial role. As Tony Juniper of Friends of the Earth put it: “The Web has become the most potent weapon in the toolbox of resistance to globalisation and the rampant free market. Governments were ambushed by the detail of information coming from other countries.” Canadian lobbying groups (who of course are experts on American imperialism, cultural and otherwise) deserve particular credit here, as does the Province of British Columbia, which denounced the MAI in ringing terms in its House of Commons; likewise the French government, which commissioned the independent Lalumière report on the MAI and acted on its damning conclusions by abruptly withdrawing from the negotiations on 14 October 1998, thereby effectively bringing them to an end.


This was quite an astonishing achievement by grass-roots organisations confronting the major global concentration of power. But as Noam Chomsky points out in his article “Power in the Global Arena” in New Left Review (No.230, July/August 1998) the press reaction around the developed world was most instructive. Thus the Financial Times (30 April 1998) portrayed the episode as a “horde of vigilantes” who had overwhelmed the poor OECD and the corporate world. Elsewhere The Australian (14 January 1998) blamed what it called the “xenophobic hysteria” of an “unholy alliance of aid groups, labour and environmentalists” (in other words the people), while the New Republic (5 December 1997) supposed to be the voice of American liberalism, warned of the “flat earth” and “black helicopter crowd.”

Chomsky’s malediction on the media is well deserved. As far back as January 1996 the United States Council for International Business had published A Guide to the Multilateral Agreement on Investment. And yet, according to Chomsky, the first mention of the MAI in the US mainstream press was in the Miami Herald (20 July 1997). The following December the Chicago Tribune felt constrained to note that the matter had “received no public attention or political debate”, except in Canada, concluding that “this obscurity seems deliberate”. That governments and their corporate clients (or rather, corporations and their client governments) should want to hush up the MAI for as long as possible is, from their point of view, entirely understandable of course. But that they should be aided and abetted in this by the mainstream media?! Not content with simply ignoring the MAI in the first place, once the secret leaked out, they actually turned the flame-thrower on those impertinent enough to criticise it. This tells you everything you need to know about the corporate media. It’s not simply a case of right-wing newspapers’ long love affair with “free trade”, but the fact that increasingly globalised, albeit American-dominated, media corporations such as NewsCorp themselves have a direct and fundamental interest in the success of “liberalising” measures such as the MAI. With large sections of the media now in the hands of rapacious global barons such as these, the MAI has no need of government secrecy: the media corporations’ own self-interest is a far more effective guarantor of silence and complicity.

On 15 December 1998 the Trade and Industry Select Committee published its Third Report on the MAI. Again, this amply testifies to the tremendous campaign waged against the agreement by the NGOs, and its conclusions are pretty damning. They include the following:

• A persuasive case has by no means been made for a multilateral investment agreement.

• Increasing competition for foreign investment must not encourage an international “race to the bottom” where standards are continually reduced or derogated from in order to appeal to investors in developed countries.

• In any future negotiations of a multilateral investment agreement the protection of existing regulatory standards [should] be of central concern.

• A rules-based multinational investment agreement should be based upon strong, non-discriminatory domestic regulatory systems, to maintain and improve environmental, labour, consumer protection, health and safety and other standards.

The Report received virtually no media coverage, and one wonders if the Government released it in the run-up to Christmas to ensure just such an outcome. However, for anyone interested in the MAI it’s essential reading, containing the draft Agreement itself and the arguments for and against it. The appendices are especially worth looking at, since they consist largely of submissions from NGOs opposed to the MAI, such as Oxfam, Save the Children and Friends of the Earth, and thus form a particularly useful anti-MAI primer. And, if you want to know what kind of world big business has in mind for you, turn to the written submission from the Confederation of British Industry, which is full of seemingly bland but in fact deeply weaselly talk about investors’ need for “guarantees for entry and establishment, equal competitive opportunities, protection of existing investment and economic activity, and avoidance of distortions which might have a detrimental effect on economic growth and development.” In other words, investors should have the absolute right to march into any country they chose, compete “equally” with indigenous companies by using their financial might to create a playing field sloping vertiginously in their favour, and to dismiss as “distortions” any measures which the host country may have the temerity to introduce in order to try to protect itself from such predation. And, to cap it all, these apostles of global “free market” Darwinism then have the gall to demand economic “protection”!

In March this year the Government submitted its response to the Report. But whilst it did indeed accept many of the Committee’s strictures, it also stated that: “The Government notes that barriers to foreign investment continue to exist. We believe that it would be beneficial both to the UK, to other countries and to the world economy if action could be taken at a multilateral level to address these barriers and provide a more stable climate for investment.” Thus, from the point of view of those opposed to the MAI, and anything remotely like it, a battle has been won but the war is very far from over. It now looks as if discussions on MAI-type proposals will move back to the WTO – which may be more inclusive than the OECD, but is not exactly famous for its support of developing countries; nor has it been a champion of environmental issues and the rights of working people. It’s also worth noting that when Trade Minister Brian Wilson appeared before the Committee he told it that “there is already an investment liberalisation agenda within the WTO and one way forward would be to seek to ensure that when the next trade round is defined within the WTO, investment is one of the major areas of discussion”. Meanwhile, the US is still pursuing MAI-type “liberalisation” in the Free Trade Area of the Americas, and the IMF recently tried (albeit without success, for the moment) to force similar measures on its members by changing its Articles of Association. The US has also noted that the potential EU member states of central and eastern Europe are gradually putting EU legislation – known as the “acquis communautaire” – onto their statute books, and US officials have been busy putting discreet, but highly unethical, pressure on these states to persuade them not to apply the audiovisual “acquis communautaire”. In return, they are offering support for their OECD membership applications. Thus these countries are being offered the “choice” of a future in which either their audiovisual sectors are entirely dominated by US interests and products, or they’re denied the undoubted cachet of OECD membership. In other words, the agreement may have failed to get through the OECD but its spirit is alive and well, and now haunts discussions about all sorts of similar measures which are being conducted as secretively as the original MAI negotiations.

In announcing the withdrawal of the Government’s support for the MAI, Brian Wilson said: “I think this is the opportunity to start with a blank piece of paper, to define our objectives afresh, and then seek to pursue them on a consensual basis.” To which Jessica Woodroffe, the World Development Movement’s Head of Campaigns, replied: “His paper will need to be very big and very blank. It is not just an international agreement which needs redefining but a whole economic model.” Now that erstwhile “free market” gurus such as John Gray and George Soros are busy retracting their former beliefs, and NGOs have taken a powerful lead in articulating people’s deep-seated hostility to unregulated global capital flows and to the havoc which these play with their lives, perhaps this redefinition stands a chance. But let’s not delude ourselves about the sheer strength of the forces ranged against it.

Culture or Monoculture? can be ordered from the Office of Carole Tongue MEP, Suite 214, Coventry House, 1 Coventry Street, Ilford, Essex IG1 4QR or telephone 0181 554 3236. The Trade and Industry Select Committee Report (HC112) is available for £14.70 from HMSO. Also worth reading is Noam Chomsky’s latest collection of essays, Profit over People, published by Seven Stories Press at £12.99. There is a vast number of websites devoted to the MAI, though few deal with its media implications in any detail. Start with this is Carole Tongue’s. Then move onto a really superb Canadian website which is linked to it,

Cartoons courtesy of A. Krauze and The Guardian.