Transcript Diapositiva 1

International Investment
Agreements: Recent Trends in
Investor-State Case Law and Treaty
Negotiation
Introduction and Background
Roberto Echandi
Taipei, March, 2011
Key Concepts
• Foreign Direct Investment
• Investor gets involved in the administration or productive
activities of an enterprise
• Portfolio Investment
• Investor only finances the activities of an enterprise through a
financial instrument, and does not get involved in the productive
activity of the enterprise
• Distinction between FDI and Portfolio is not always clear
• Other investments:
• intangible assets (IPRs), contracts
Trends in international investment
• Investment is powering international trade and the world
economy as a whole…
• More goods and services are reaching consumers
through foreign affiliates than through exports…
– Global exports 2009
• Merchandise: 15.775 U.S.$ billion
• Commercial services:3.730 U.S.$billion (WTO secretariat)
– Sales of foreign affiliates in 2009:
• 29.298 U.S.$ billion (UNCTAD)
• FDI generates more trade and vice-versa
The different kinds of FDI and
their impact on development
• Natural resource-seeking FDI
• Factors:
– Location of natural resources
• Historical perspective
– Oldest type of FDI
• Political economy: This type of FDI raises
issues such as
– Fair distribution of gains derived from exploitation
of resources
– Sovereignty over natural resources
– Labour rights and other social conditions of
workforce (i.e.health)
– Environmental matters
The different kinds of FDI and
their impact on development
• Market-seeking FDI
• Factors
–
–
–
–
Market dimensions and income per capita
Market growth
Consumers’ specific preferences
Kind of goods and services to be provided
• Historical perspective
– Import-substitution industrialization (ISI)
• Political economy: This type of FDI raises
issues such as real or perceived effects over
– Domestic production
– National security
– Role of IIAs…
The different kinds of FDI and
their impact on development
•
Efficiency-seeking FDI
– Tariff liberalization promoted by GATT in
more than 50 years (average tariff for
manufactures decreases from 40% to 5% )
– Greater pressure over enterprises and need
for lower costs of factors of production
•
This kind of investment tends to be:
–
–
–
–
•
Export oriented
Net generator of foreign exchange
Generator of jobs
Significant potential gains in terms of
expansion and diversification of export
supply of host economy and transfer of
technology
Political economy of this type of FDI
– Determined by the level of competitiveness
of the host country vis-á-vis other potential
host countries (importance of signals)
– Increasing controversy in home countries
Relationship between trade and investment…
To a great extent, today FTAs are about investment…
The international investment
legal framework
• National level
– Specific laws applicable to foreign investment
– Domestic regulatory framework
• Bilateral level
– Bilateral Investment Treaties (BITs)
• Regional level
– Chapters on Investment in Free Trade Agreements
(FTAs)
• Multilateral level
– Applicable rules in the WTO Agreements
– Other institutions
International investment legal framework:
national level
National Policy changes 1992–2009
(per cent)
National policy developments:
increasing regulation with continued
liberalization
Liberalization/promotion:
98% in 2000 to
70% in 2009 of changes
Regulations/restrictions:
2% in 2000 to
30% in 2009 of changes
Source: UNCTAD, WIR 2010
9
Legal Framework for International
Investment: Bilateral Level
• Background
– Treaties of Friendship Trade and Navigation
• 1st USA-France 1788
– Customary International Law
• State responsibility to aliens and their property
– First BIT, 1959, Germany-Pakistan
Legal Framework for International Investment:
Bilateral Level
Annual BITs worldwide, 1980-2009
250
200
150
100
50
Source: UNCTAD
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
Legal Framework for International
Investment: Regional Level
Proliferation of PTAs with investment provisions
Number of IIAs (other than BITs and DTTs)
350
300
250
200
150
100
50
0
1957 – 1967
Source: UNCTAD
1968 – 1978
By period
1979 – 1989
1990 – 2000
Cumulative
2001 – 2009
The “Patchy” Legal Framework for
International Investment: Multilateral Level
• There is no multilateral agreement on investment
• Failed attempts to bring investment into a multilateral setting
•
•
•
•
Applicable rules on WTO Agreements
–
•
Havana Charter (ITO)
MAI
WTO
GATS, TRIMs, TRIPs, ASCM, DSU
Other relevant investment-related institutions
–
–
–
–
–
–
–
–
–
–
–
International Centre for the Settlement of Investment Disputes (ICSID)
Multilateral Investment Guarantee Agency (MIGA/World Bank)
Arbitration Centres (ICC, Stockholm Chamber of Commerce)
Other World Bank agencies (IFC,FIAS)
Energy Charter Treaty
UN Global Compact
OECD Guidelines on Multinational Enterprises
OECD Convention on Bribery and Corruption
OECD Guidelines on Corporate Social responsibility
OECD Policy Framework for Investment
OAS Anti-bribery convention
Interaction with broader spectrum
of public international law
• Interaction of IIAs with the WTO… not always straightforward…
– GATS
• MFN, National Treatment, Market Access, Schedules, etc.
– TRIMs
• Performance requirements
– TRIPs
• Definition of investment and TRIPs
– ASCM
• Investment incentives
– DSU
• Coherence interpretation of IIAs
• Interaction with other matters regulated by public international law
– Human rights
– Labour issues
– Protection of the environment
International Investment Law in the
making…
50
400
45
350
40
300
35
30
250
25
200
20
150
15
100
10
5
50
0
0
2009
All cases cumulative
2008
2007
2006
2005
2004
2003
2002
2001
Non-ICSID
2000
1999
1998
1997
1996
Source: UNCTAD
1995
1994
1993
1992
1991
1990
1989
ICSID
Cumulative number of cases
Annual number of cases
Known investment treaty arbitrations
(cumulative and newly instituted cases) 1989-2009
Final remarks
• International Investment
– Key element of international political economy and development
– Need to avoid simplifications: investment is not a homogenous
phenomenon
– Is reshaping international economic relations as well as transforming
domestic economies
– Can no longer be framed in a North-South mindset
– One of the most dynamic areas regulated by international economic law
• International investment regime
–
–
–
–
–
Continues to grow as more IIAs continue to be negotiated
Constantly evolving as a result of evolution of jurisprudence
Is making investment relations to become increasingly “legalized”
Increasing importance for developing and developed countries alike
Increasing importance for private sector
Thank you
for your attention
[email protected]