WRITTEN QUESTION P-1127/98

by Nuala Ahern (V) to the Commission

(30 March 1998)

Subject: The negotiations on an OECD Multilateral Agreement on Investments (MAI) and the impact of such an agreement on the Internal Market and the "acquis communautaire"

As soon as the project for an OECD Multilateral Agreement on Investments (MAI) became known to a broader public, thanks to NGOs and the initiative of the REX Committee in the European Parliament rather than as a result of information from the Commission, a large number of concerns were raised. These include worries about lower standards and obstacles for development in the following fields of Community law and policy: the protection of health and the environment, social and labour law, the protection and promotion of cultural and biological diversity, as well as negative impacts on regional and development policy, including the promotion of human rights and the rule of law. On the basis of these - obviously rather well-informed - concerns.

I would like to ask the Commission the following interrelated questions:

What action has the Commission taken in order to ensure that the MAI negotiations are not closed on 28 April and agreement reached on the basis of a document which does not fully take account of these concerns?

Has the Commission evaluated the fairness and equitableness of the draft MAI rules on dispute settlement and the potential impact of the envisaged procedure on the sustainability of exceptions, especially in the light of experience from the framework of the WTO and other multilateral agreements with similar contents, such as NAFTA?

Has the Commission's legal service examined the draft MAI from the perspective of immediate or longer term impact on the acquis communautaire, including obligations, that the Agreement might set, to amend legislation in areas which now, and in the light of the Amsterdam Treaty, involve the European Parliament as co-legislator, and the implications thereof on procedural requirements (applicability of Article 228(3), second sub-paragraph)?

Has the Commission taken notice of the demand in the European Parliament's resolution A-0073/98, that any draft of the MAI should be submitted to the European Court of Justice for full examination, which obviously should take place before signing the Agreement on behalf of the Communities, and has the Commission already acted in this matter?

Answer given by Sir Leon Brittan on behalf of the Commission

(6 May 1998)

The Commission regrets that some of its negotiating partners are not ready to conclude the negotiations by the end of April as provided in the mandate given by Organisation for economic co-operation and development (OECD) ministers in May 1997. The Commission considers that successful conclusion of the multilateral agreement on investments (MAI) is in the interest of the Community. However, a credible commitment to conclude from our negotiating partners is needed to make it useful to continue the negotiating process. The Commission sees the next OECD ministerial meeting as the best opportunity for its partners to show their attachment to a timely conclusion of the negotiations. In the meantime the Commission will continue the dialogue on the best possible outcome of the negotiations with industry, trade unions and civil society, as well as with the Parliament.

The state-to-state and investor-to-state dispute settlement mechanism of the draft MAI is an important element in creating transparent, non-discriminatory and enforceable rules for foreign direct investment. The provisions of the dispute settlement mechanism, as well as the other aspects of the MAI, including the country-specific exceptions, are still under discussion. The Commission is confident that in the end an equitable mechanism will emerge. In addition, care will be taken in the formulation of exceptions, in order to ensure sustainability of the policies and measures these exceptions intend to protect.

The Community will launch the necessary exceptions to protect all existing Community rules. In addition, the regional economic integration organisation clause, as proposed by the Community, will ensure the continued development of Community integration. The acquis communautaire will therefore not suffer from any immediate or longer term impact from the MAI.

At the present stage of the deliberations on the MAI the Commission does not see any conflict between the agreement, on the one hand, and the EC Treaty and the acquis communautaire, on the other hand. The Commission intends to avoid such a conflict in the final text of the MAI. Therefore there is no need to consider obtaining the opinion of the European court on the MAI at this stage.