Japan and the European Union will jointly propose creating a set of rules to protect direct cross-border investments from official seizures and illicit interference at the next round of world trade liberalization talks, government sources said Thursday.

Japan and the EU will put forward the proposal during the next round of global trade and investment liberalization talks to start in 2000 under the auspices of the World Trade Organization, the Geneva-based global trade watchdog, the sources said.

A similar attempt to create such protective rules by the two and other member states of the Organization for Economic Cooperation and Development failed in December, when some OECD members rejected the proposed Multilateral Agreement on Investment.

France rejected an invitation to join talks to lay down MAI rules, on grounds that facilitating direct investments by foreign companies on its soil might further dilute France’s own cultural features.

Talks at the OECD venue were also dampened by the opposition of various environmentalist nongovernmental organizations, which blasted the proposed rules as leading to the greater presence of multilateral corporations — and therefore industrial pollution — in developing nations.

The breakdown of MAI talks has left Japan and the EU worrying that the lack of such protective norms “would discourage companies from moving production and other activities to developing nations, as such an absence would make it more likely for companies to encounter troubles and disadvantages” related to their properties and activities, a senior Foreign Ministry official said.

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