Multilateral Agreement on Investment-An Analysis

The Multilateral Agreement on Investment (MAI) mooted by the OECD will bring about major changes in the foreign investment regime. Existing policies of government regulation of foreign investment would have to be altered completely and in their place would have to be introduced policies for the protection of foreign investors. By truncating the powers of nation-states, the proposed foreign investment regime raises several important issues. One critical question relates to the implications of lifting of controls over the movement of all forms of capital. Another fundamental issue is the future of the post-war multilateral framework built essentially around sovereign states having inviolable rights over their economic domains.