Multinational enterprises (MNEs) multiplied their profits made in developing countries by four between 2002 and 2011 (at current prices). In Latin America and the Caribbean, they rose from US$20 billion in 2002 to US$113 billion in 2011. The growth rate has been even higher in Africa and China, but much lower in developed countries. This rise is explained by an increase in FDI stock in developing economies and the higher average profitability of MNEs.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
A recent Perspective concluded that, in countries given to sudden shifts in policy, "a host country government equity stake in a project may decrease project risk by giving the state a reason not to demand a renegotiation." An investor may benefit, but does the host country? In my experience, rarely.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
Topic:
Economics, Human Rights, International Trade and Finance, Governance, and Reform
Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Foreign Direct Investment
In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Rafael Tamayo-Álvarez, Maria Alejandra Gonzalez-Perez, and Juan David Rodriguez-Rios
Publication Date:
06-2014
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Free trade agreements (FTAs) and international investment agreements (IIAs) are regarded as instruments to promote world trade, investment flows and market liberalization. The question, however, is whether they promote sustainable development as well. This Perspective contemplates incorporating voluntary codes of conduct for multinational enterprises (MNEs) in IIAs to strengthen the protection of labor rights, "the social component [...] embedded in the notion of sustainable development."
Topic:
Economics, International Cooperation, International Trade and Finance, and Labor Issues
Many governments offer incentives to attract foreign direct investment (FDI). For example, the renewable energy sector has benefitted from large national incentive schemes in the past decade. However, the withdrawal of such incentives can lead to investors bringing investment treaty claims against host countries. This Perspective looks at some claims host countries face from investors in the renewable energy sector and their implications.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
In July 2013, after nearly three years of work, the United Nations Commission on International Trade Law (UNCITRAL) adopted a set of arbitration rules that will help open some investor-state arbitrations to public view. The UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules) were crafted with input from governments, academics, arbitration practitioners, and non-governmental organizations, and approved by consensus by the member states. When applied, the Transparency Rules will require disclosure of information submitted to, and issued by, arbitral tribunals throughout proceedings, mandate open hearings and expressly allow for participation by non-parties to a dispute. The Transparency Rules also guard against disclosure of confidential information and establish a repository in which all information will be published.
Topic:
International Law, International Trade and Finance, and Treaties and Agreements
Since China and the European Union (EU) announced their decision to negotiate a bilateral investment treaty (BIT) at the 14th China-EU Summit in February 2012, the two sides have engaged in two rounds of negotiations. If successful, it will be the first standalone EU BIT, a BIT between the world's largest developed economy and the world's largest developing economy, and will occupy a unique place in the history of BIT negotiations.
Topic:
Economics, International Trade and Finance, Bilateral Relations, and Foreign Direct Investment
Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75 % of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, Foreign Direct Investment, and Governance