Along with the increasing importance of the role of investment in international economics, the need to set new comprehensive and binding international rules on investment with an understanding of the rules currently in existence has grown. The OECD opened discussions regarding the foreign direct investment in 1991, and at the Ministrial Meeting in May 1995, it was decided that negotiations on the preparation of the MAI would be conducted over the ensuing two years.
Main Elements of the MAI Negotiations
At present, drafts and/or notes by the Chairman have been produced for such issues as investment protection, key personnel, geographical scope of coverage of MAI, and so on. In addition, an expert group has been holding discussions on the treatment of taxation systems since April 1996.
Although these talks embrace a great deal of topics, the actual negotiations between OECD member countries is seen to be progressing at a pace in line with the original timetable, thanks to the cooperation of the countries involved. However, there is the strong concerns over the very establishment of the MAI held by non-OECD Member countries (particularly Asian countries). Also the latter stage of the negotiations regarding the adaptation of the MAI to each country's domestic conditions are expected to lead to tough negotiations between the countries involved. Therefore, further efforts to inform all countries of the significance of the agreement and to gain the understanding of all concerned will most likely be necessary.
In addition, along with the intensification of investment, the importance of intellectual property rights is increasing. Intellectual property rights should be incorporated into the definition of investment assets.
The definition of investor should be broadened to cover companies established in non-MAI member countries that are controlled by an investor in signatories. Although the existence of a variety of cases involving the nationality of subsidiaries and sub-subsidiaries can be imagined, the clearest possible definition (using quantitative criteria such as ownership of over 50% of the stock) should be adopted.
Furthermore, the drawing up of the MAI should be seen as an opportunity to apply multilaterally the measures avoiding double taxation and preventing tax evasion in existing bilateral tax agreements.