Bilateral Investment Treaties and FDI Flows

Given that one of the principal purposes of bilateral investment treaties (BITs) is to help countries attract investment flows (by protecting investments), it is only natural that the question has been raised whether they do, in fact, lead to higher investment flows. The main studies on this topic from the past decade are collected in The Effect of Treaties on Foreign Direct Investment: Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows (Oxford University Press, 2009), a volume I edited with Karl P. Sauvant

A business perspective on a China - US bilateral investment treaty

The recent Perspective “A China - US bilateral investment treaty: A template for a multilateral framework for investment” by Karl P. Sauvant and Huiping Chen raises very important issues. I welcome the focus on the US-China investment negotiations and believe Sauvant and Chen are asking many key questions. But their analysis and their recommendations end up, I believe, seriously off-track. I will offer an alternative perspective, one shaped both by my previous life as an international economic policy-maker/negotiator at the State Department and the US Trade Representative’s office and my current role at the United States Council for International Business (USCIB), representing global companies on investment policy issues, including investment treaties

FDI protectionism is on the rise

Over the past two decades or so, countries have liberalized their FDI regulatory frameworks and have put in place an international investment law regime that provides various protections for international investors. In the past few years, however, there are signs that countries are reevaluating their approach toward such investment. As a result, FDI protectionism is on the rise, with screening of inward M&As becoming more frequent. Typically, this is being done under the guise of"national interest"or similar concepts, often linked to strategic sectors and national champions. While the international investment law regime faces a challenge to find the right balance between the rights and responsibilities of governments and investors, care needs to be taken that the rise of FDI protectionism does not endanger a rules-based approach to FDI. An independent FDI Protectionism Observatory to monitor new protectionist measures and name and shame countries that take them is therefore needed.Debt Markets,Emerging Markets,Investment and Investment Climate,,Trade and Regional Integration

China moves the G20 on international investment

Under China’s leadership, the G20 adopted “Guiding Principles for Global Investment Policymaking,” put investment facilitation on the international agenda and institutionalized an additional platform for investment discussions. The challenge is now to build on these accomplishments

What will an appreciation of China's currency do to inward and outward FDI?

A revaluation of the Chinese yuan would affect the country's inward and outward FDI, not just its exports and imports. The impact on FDI inflows to China would be both positive and negative. On the other hand, revaluation is likely to provide a strong boost to overseas investments by China's multinationals, which have been rising rapidly in recent years. Suspicions that China's outward FDI is politically motivated are not so far borne out by systematic evidence. The rest of the world should learn how to benefit from this investment, not try to raise protectionist barriers against it

Are SWFs Welcome Now?

This perspective documents the change in attitudes of Western governments to foreign direct investment from sovereign wealth funds. The authors propose an analysis of sovereign wealth fund investments and their impact on target firms in order for recipient governments to formulate the proper regulatory response to sovereign direct investment

Three challenges for China’s outward FDI policy

Since China adopted its "going out" policy in 2001, her outward foreign direct investment (OFDI) flows have grown rapidly, reaching US$84 billion in 2012 (although the stock remains small). That year, China was the world's third largest outward investor (after the US and Japan). This performance raises all sorts of issues, especially because state-owned enterprises (SOEs) control some three-quarters of the country’s OFDI stock. Three challenges are addressed in this Perspective

The E15 Task Force on Investment Policy

The International Centre for Trade and Sustainable Development and the World Economic Forum had established the E15 Initiative, to examine the challenges faced by the international trade and investment regime. One of the project’s Task Forces dealt with investment policy. CCSI’s Karl P Sauvant was asked to be the Theme Leader of that Task Force, with the responsibility of preparing an Overview of the issues, chairing the meetings of the Task Force and formulating the final policy recommendations. The goal was to deliver a credible, actionable and comprehensive set of policy options for the evolution of the global trade and investment system to 2025. The resulting E15 investment policy options paper, released in January 2016, is available here, and the synthesis of the policy options is available here. In the context of that Initiative, he and Khalil Hamdani prepared a “Think Piece” that proposed to launch an International Support Programme for Sustainable Investment Facilitation to encourage the flow of FDI for the purpose of advancing sustainable development

Policy Options for Promoting Foreign Direct Investment in the Least Developed Countries

Foreign direct investment (FDI) plays an important role in the world economy and has the potential to contribute towards accelerating the process of economic growth and sustainable development in the least developed countries (LDCs). The paper provides a brief overview of recent trends and patterns in FDI flows to the LDCs, and then takes stock of the policies, programmes and measures pursued by host and home countries and by international organizations to stimulate FDI flows to LDCs and increase their benefits for these countries. It then lays out a number of policy proposals on how flows to LDCs, and the benefits associated with them, can be enhanced. Finally, it outlines some options for international action to strengthen such efforts – proposals and options that are also relevant to other developing countries