The MAI, an international agreement addressing the
regulation of investment, is currently being negotiated
within the Organization for Economic Cooperation and
Development (OECD). The OECD is comprised of 27 leading
industrialized countries, who collectively account for
over one-half of the world's foreign investment. The
MAI will mandate that member nations (and subnational
governments such as states) not discriminate against
foreign investment. In addition to banning explicit
discrimination, the MAI may also preclude laws which,
although facially nondiscriminatory, have a "discriminatory
effect" on foreign investment. Other issues which may
be addressed under the MAI include a ban on expropriation
or other measures deemed to have an equivalent effect,
regulation (or possibly prohibition) of investment incentives,
and a dispute resolution system which would permit investors
to directly institute legal challenges. The Harrison Institute is preparing a paper on the
MAI for the Western Governors' Association. The paper
focuses on the MAI's implications for state sovereignty
and regulatory authority and proposes strategies for
the states to employ to protect their interests. Specifically,
we are looking at the Constitutional implications of
the various potential dispute resolution systems which
could be established under the MAI. We are also researching
the extent to which substantive obligations imposed
on the states under the MAI would exceed Constitutional
limitations on the states' authority to discriminate,
either explicitly or in effect, against foreign investment.
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