Dear XXX,

The Secretary-General has asked me to respond to your recent card concerning the Multilateral Agreement on Investment (MAI) and to thank you for communicating your concerns. Your correspondence is part of an important public debate about the MAI, which the Secretary-General welcomes.

Your card suggests an underlying concern about foreign investment as a whole, quite apart from the MAI itself. The O.E.C.D. and its 20 member countries take the view that free capital flows including foreign direct investment represent a positive force in economic development producing jobs and raising standards of living in all countries. Similarly, Agenda 21, the product of the United Nations Conference on Environment and Development (the 1992 Rio Summit), advocates higher levels of foreign investment as a means of achieving the goal of sustainable development.

The O.E.C.D. countries collectively account for a large part of foreign direct investment flows worldwide: some 85% of outflows and 65% of inflows. Accordingly, these countries have a major stake in the rules that govern international investment. The decision in 1995 of O.E.C.D. Ministers to launch the MAI negotiation was also a logical step to consolidate and complete the existing O.E.C.D. instruments -- in particular, the 1961 Codes of Liberalisation and the 1976 Declaration and Decisions on International Investment and Multinational Enterprises -- which have helped promote international investment and economic co-operation for many years. The O.E.C.D.'s activities in other fields (such as development assistance, the environment and combating bribery and corruption) complement the MAI negotiations.

The principle which is at the heart of the MAI is non-discrimination as between domestic and foreign investors. Applying this national treatment principle, the MAI will not interfere with the freedom of governments to implement their own policies concerning labour or environment standards, for example, as long as these standards are not more stringent for foreign investors than for domestic investors. In other words, the MAI will require fair and non-discriminatory treatment of foreign investors, not deregulation. Furthermore , the MAI is likely to include explicit provisions against lowering such domestic standards as a means of attracting foreign investment. Other possible provisions relating to the environment and to labour are under consideration. Associating the O.E.C.D. Guidelines for Multinational Enterprises, which encourage responsible corporate behavior, is also likely (contrary to your card, investor-to-state dispute settlement has been for in international investment treatment for many years without abuse by foreign investors). Also, special concerns of individual countries joining the MAI can be the subject of country-specific reservations.

The MAI will be a free-standing international treaty to which any country will be able to adhere if willing and able to meet its requirements. A prospective new member will have the opportunity to negotiate the terms of its entry into the MAI. These are continuing efforts to advise and inform non-O.E.C.D. countries of the state of the negotiations. Many countries from all parts of the world are expressing serious interest. Similarly, there is a continuing consultation with environmental and other nongovernmental organizations, with labour and with business groups. For example, a special meeting was held last fall with representatives of approximately 50 Egos to review the progress of the negotiations and their concerns. We have had numerous communications as a follow-up to that session. Many O.E.C.D.countries, including your own, hold similar consultations domestically.

I enclose for your information a copy of the recent O.E.C.D. Policy Brief on the MAI which summarises its background, objectives and features in greater detail. For additional information, including a copy of the current MAI negotiating text, you may also wish to consult the O.E.C.D.'s MAI International site: http://wow.okayed.or/deaf/cmis/ma/maindex.htm.

Yours truly,