The Multilateral Agreement on Investments
this vague and sweeping agreement will
a strong impact on Canadian culture
by H.A. Fraser, ABM Editor
- The Multilateral Agreement on Investments (MAI) is a vague and sweeping
agreement being quietly forged in political backrooms. It will affect the
cultural industries of all signatory countries including the U.S. and Canada.
However, the Canadian Conference of the Arts Director, Keith Kelly, believes
the agreement will have a particularly strong impact on Canadian culture.
The CCA in Ottawa has sent up a red flag on the current version of the
The MAI, an initiative of the Organisation for Economic Cooperation and
Development (OECD), will be concluded over a year from now in September,
1998, but the CCA is not waiting for the outcome. It has spoken out with
detailed information on the agreement which the lobby group believes will
prevent all Canadian governments from setting conditions on foreign ownership
of arts and communication enterprises. Such enterprises would include radio
stations, newspapers, magazines, TV networks, publishing houses.
- Mr. Kelley agrees that there will be economic benefits to opening the
gates to investment in both directions. All signators to the MAI must extend
Most Favoured Nation and National Treatment to foreign investors. In other
words, any nation which signs the agreement must provide exactly the same
benefits to other signatory states as it does to its own investors and
- However, in spite of the economic potential to Canadian investors in
foreign markets, Mr. Kelly has strong reservations about its viability
for Canadians at home. He is concerned that the MAI, as it now stands,
would prevent Canadian governments from imposing domestic content requirements
on foreign investors in the arts and communications. For example, if the
Canadian government wished to sell TVO, it would have to open the bidding
process to all investors who signed the MAI. Mr. Kelly commented to ABM
that in its current state, "...it [the MAI] must be stopped because
it will mean the erosion of our cultural sovereignty."
- While France has applied for a cultural exemption from the agreement,
Canada, represented at the Washington table by Bill Dymond, has not yet
applied for a similar "carve-out". It has yet to be seen whether
cultural exemptions are allowed.
- Mr. Kelly wrote in a Bulletin this past April that under the MAI, investors
are broadly defined to include:
- "a legal person or any other entity constituted or organised under
the applicable law of a Contracting Party (signatory state), whether or
not for profit, and whether private or government owned or controlled,
and includes a corporation, trust, partnership, sole proprietorship, joint
venture, association or organisation."
- The agreement defines investments as:
- "(a) Every kind of asset owned or controlled, directly [or indirectly]
by an investor including:
- (i) an enterprise (being a legal person or any other entity constituted
or organised under the applicable law of the Contracting Party, whether
or not for profit, and whether private or government owned or controlled,
and includes a corporation, trust, partnership, sole proprietorship, branch,
joint venture, association or organisation);
- (ii) shares, stocks or other forms of equity participation in an enterprise,
and rights derived therefrom;
- (iii) bonds, debentures, loans to and other form of debt [of an enterprise],
and rights derived therefrom;
- (iv) rights under contracts, including turnkey, construction, management,
production or revenue- sharing contracts;
- (v) claims to money and claims to performance;
- (vi) intellectual property rights;
- (vii) rights conferred pursuant to law or contract [such as] or [by
virtue of] concessions, licenses, authorisations and permits;
- (viii) any other tangible and intangible, movable and immovable property,
and any related property rights, such as leases, mortgages, liens and pledges,
[unless such assets lack the characteristics of an investment.]"
- The proposal goes even further in accommodating foreign investment.
The MAI provides special treatment which would guarantee to foreign investors
the right to have temporary entry and stay of investors and key personnel
in any other signatory state. It also provides the right of a dependent
of such investors or key personnel to work in Canada during the temporary
stay [a period not exceeding 1-3 years].
- To be eligible for temporary entry and stay the individuals "must
comply with applicable measures relating to public health and safety, criminal
law and national security".
- As well as creating new rights for the global investor, the agreement
imposes restrictions on signatory states:
- "No Contracting Party may impose, enforce or maintain any of the
following requirements, or enforce any commitment or undertaking, in connection
with the establishment, acquisition, expansion, management, operation,
or conduct of an investment of an investor of a Contracting Party or of
a non-Contracting Party in its territory:
- (a) to export a given level or percentage of goods or services;
- (b) to achieve a given level or percentage of domestic content;
- (c) to purchase, use or accord a preference to goods produced or services
provided in its territory, or to purchase goods or services from persons
in its territory;
- (d) to relate in any way the volume or value of imports to the volume
or value of exports or to the amount of foreign exchange inflows associated
with such investment;
- (e) to restrict sales of goods or services in its territory that such
investment produces or provides by relating such sales in any way to the
volume or value of its exports or foreign exchange earnings;
- (f) to transfer technology, a production process or other proprietary
knowledge to a natural or legal person in its territory [except when the
requirement is imposed or the commitment or undertaking is enforced by
a court, administrative tribunal or competition authority to remedy an
alleged violation of competition laws or to act in a manner not inconsistent
with other provisions of the Agreement];
- (g) to locate its headquarters for a specific region or the world market
in that Contracting Party;
- (h) to supply one or more of the goods that it produces or the services
that it provides to a specific region or world market exclusively from
the territory of that Contracting Party;
- (i) to achieve a given level or value of production, investment, manufacturing,
sales, employment, research and development in its territory;
- (j) to hire a given level or type of local personnel;
- (k) to establish a joint venture; or
- (1) to achieve a minimum level of local equity participation."
- The MAI, as it now stands, may open the door too wide for those who
are not already large international players. Mr. Kelly believes that, "The
ability of government to encourage regional development programs, co-production
agreements, investment policies linked to human rights and environmental
considerations will be in direct jeopardy if Canada signs this agrement."
- For More Information:
- Keith Kelly, National Director
- (613) 238-3561; (613) 239-4849 FAX
- OECD can be found at http://www.oecd.org.
- The OECD Washington Center can be found at http://www.oecdwash.org.