Foreign
direct investment (FDI) is generally
recognised as one of the key factors in economic growth
and wealth. The UK government believes that investment
flows benefit both developed and developing countries,
creating opportunities for investors and helping developing
countries to achieve sustainable development.
Investment
Discussions in International Organisations
The
UK is involved in international investment rules and
policy discussions at a number of international fora;
WTO
and Investment
The
background to the UK Government’s view with regard to
negotiations on foreign direct investment (FDI) in the
WTO was the concept of setting in place a simple, basic
framework of rules based on transparency and non-discrimination
in the treatment of foreign investors. The government
felt that a WTO agreement on FDI could provide the stable
and predictable climate that foreign investors seek
and help countries, especially in the developing world,
that do not currently attract much FDI.
It
is worth recalling that the EU/UK position differs greatly
from the OECD Multilateral Agreement on Investment (MAI)
negotiations. For example by conducting negotiations
in the WTO, developing
countries would be involved. In addition, the MAI used
a "top down" approach (every sector was included
unless it was explicitly made an exception), but the
EU proposed that a WTO negotiation take a "bottom
up" approach (participants would make specific
negotiated commitments regarding access to sectors for
investment). Also unlike the MAI, the WTO would have
only state-to-state dispute settlement procedures.
WTO
Working Group on Trade and Investment (WGTI)
Established
after the WTO Ministerial in Singapore in 1996 the WGTI
had a remit to carry out analytical work on the relationship
between trade and investment, including areas such as
FDI flow, technology transfer, investment incentives
and multilateral rules.
The
aim was that negotiations on a multilateral investment
agreement would be launched at the fifth ministerial
conference at Cancun in 2003. However WTO members were
unable to agree, by explicit consensus at that meeting,
on this course of action. At the July 2004 meeting of
the WTO General Council, a decision was taken (dated
1 August) that ‘no work towards negotiations on (trade
and investment) will take place within the WTO during
the Doha Round’.
The
Government supported the idea of negotiations in principle
(subject to the proviso that it would not sign up to
something that it did not believe to be in the interests
of developing countries), but has of course accepted
this decision. The
Europe and World Trade Directorate continues to be responsible
for developing UK policy on trade and investment in
conjunction with other interested DTI Directorates,
the Department For International Development and other
Government Departments.
WTO
Committee on Trade Related Investment Measures (TRIMs)
The
TRIMs Committee is responsible for overseeing implementation
of the WTO TRIMs Agreement, for example by discussing
notifications of TRIMs that do not conform with the
Agreement. The TRIMs Agreement commits WTO members not
to impose discriminatory investment measures that distort
trade, for example by imposing local content and performance
requirements on foreign investors. The Agreement contains transitional
arrangements allowing Members to maintain notified TRIMs
for a limited time following the entry into force of
the WTO (two years in the case of developed country
Members, five years for developing country Members,
and seven years for least-developed country Members).
The WTO investment site (link above) also covers TRIMs
and click here for a more detailed background note
(16kb).
OECD
Investment Committee (formerly known as the Committee
on International Investment and Multinational Enterprises
(CIME)). Click here for more information - International
Investment: About
The
Investment Committee has the task of further developing
and strengthening co-operation among Member countries
in the field of international investment and multinational
enterprises. It is
also responsible for OECD Guidelines for Multinational
Enterprises. Although the European Commission participates
in the meeting, the UK has direct input and there is
no agreed EU position.
OECD
Working Party on the Guidelines for Multinational Enterprises
This
Working Party overseas the implementation of the Guidelines
and associated issues such as outreach to non-OECD countries.
The UK is an active participant in this Working Party.
Further information is available on www.dti.gov.uk/worldtrade/ukncp.htm.
UNCTAD Trade and
Development Board: Commission on Investment, Technology
and Related Financial Issues
This
UNCTAD Commission examines global trends in foreign
direct investment (FDI) flows; the inter-relationships
between FDI, trade, technology and development; and
the development implications of a possible multilateral
framework on investment. It also assists developing
countries to promote inward investment and improve their
investment climate. There is an agreed EU position,
however individual EU member states are still able to
make individual contributions.
Energy Charter Treaty
The
Energy Charter Treaty obliges Contracting Parties to
endeavour to accord non-discriminatory treatment to
Investors of other Contracting Parties as regards the
Making of Investments. This obligation is relevant for
the 38 Contracting Parties who have ratified the Treaty
and for the five Signatories applying the Treaty provisionally.
An investment committee regularly meets to discuss investment
regimes in developing countries and other investment
issues relevant to the treaty. The EU does coordinate
on certain issues in the meeting but member states are
free to make their own contributions too.
Investment
Promotion and Protection Agreements (IPPAs)
IPPAs
are international bilateral agreements between governments,
which can protect and encourage British investment overseas.
They are more commonly known internationally as Bilateral
Investment Treaties (BITs). The UK has concluded 101
IPPAs with other countries, of which 94 are
in force.
IPPAs
are designed to encourage investor confidence by setting
high standards of investor protection applicable in
international law. Key elements include provisions for
equal and non-discriminatory treatment of investors
and their investments, compensation for expropriation,
transfer of capital and returns and access to independent
settlement of disputes.
The
Foreign & Commonwealth Office is the lead UK department
for the negotiation of new IPPAs and IPPA policy in
general. For further information please call FCO Economic
Policy Department on 020 7270 2672.
Copies
of UK
IPPAs can be bought from the Stationery Office;
The
Stationery Office Ltd
PO Box 29
Norwich
NR3 1GN
T: 0870 600 5522
F: 0870 600 5533
Email: bookorders@theso.co.uk
Web: www.clicktso.com
The full list of IPPAs is below:
