OECD's Proposed Multilateral Agreement on Investment

  • Don McKinnon
Foreign Affairs and Trade

New Zealand is not yet satisfied that new negotiations on the OECD's proposed Multilateral Agreement on Investment (MAI) will lead to an agreement New Zealand could sign, Foreign Minister Don McKinnon said today.

"The Government believes there is merit in establishing appropriate international rules for investment in the same way we have international rules for a range of issues from trade to whaling; from security to C02 emissions," Mr McKinnon said.

"New Zealand already provides an open and transparent regime for Foreign Direct Investment, and we have benefited substantially from it. New Zealand investors abroad would also benefit from clear international rules on investment.

"However, earlier this year, we became concerned that the MAI negotiations were not leading towards an agreement which would promote trade, investment and sustainable development and be acceptable to OECD and WTO members.

"The negotiations did not adequately address, for example, the use of investment-distorting incentives by other countries in order to attract foreign investment.

"We were also concerned that the draft agreement was not as clear as it should be on important issues to New Zealand such as the Treaty of Waitangi, preferential treatment for New Zealand providers of social services and the ability of the Government to establish 'kiwi shares' when disposing of state assets.

"The Government also believed the MAI process in the OECD was not open enough to the public.

"Consequently, New Zealand was one of those countries which, in April, sought a six month pause in negotiations. That pause was agreed to. "With negotiations likely to resume shortly, our concerns remain unresolved, and we are not yet satisfied that the MAI negotiations will lead to an agreement New Zealand could sign" the Minister said.

"New Zealand gains from being a fully active member of the OECD. When the other 28 Members of the Organisation - representing 78% of global economic output - attend meetings it is important we attend too, to ensure our concerns are heard.

New Zealand will send officials to a meeting of the MAI negotiating group in Paris on 20-21 October. Their role will be a watching one. They will outline New Zealand's concerns about the MAI, assess the views of other OECD members and report back to the Government.

"Following receipt of that report, the Government intends to consult with other political parties and keep the public fully informed of where the whole issue is going" the Minister concluded.

The New Zealand delegation will represent the Government's views at the MAI meeting. Their statement will be available at the MFAT website (www.mft.govt.nz) and from the Office of the Minister of Foreign Affairs and Trade, from 20 October 1998.