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22. The need for an international investment consensus-building process
- Author:
- Karl P. Sauvant and Federico Ortino.
- Publication Date:
- 08-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Discussions on a multilateral investment framework have recently seen a revival, as the International Chamber of Commerce, the World Economic Forum and various authors have called for negotiations on this subject. A growing number of countries have been reviewing and adapting their international investment policies. This reflects dissatisfaction with the current international investment law regime, and a desire to improve it.
- Topic:
- Economics, International Law, International Trade and Finance, and Foreign Direct Investment
23. Cost allocation in investment arbitration: Back toward diversification
- Author:
- Baiju S. Vasani and Anastasiya Ugale
- Publication Date:
- 07-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- In 2006, the Thunderbird tribunal, operating under the UNCITRAL Arbitration Rules, called for the harmonization of cost-allocation approaches in commercial and investment arbitration. Subsequent tribunals appear to be heeding Thunderbird's call paving a trend in favor of the so-called “costs follow the event” (CFtE) approach and its variations. Generally, this approach prescribes the shifting of arbitral costs and reasonable legal fees to the unsuccessful party (or based on parties' relative success) and has historically been prevalent in commercial arbitration. By contrast, the more traditional approach in investment arbitration has been to share the costs of arbitration equally, save for special circumstances, with each party covering its own legal fees (traditional approach). In the wake of what appears to be an emerging trend in favor of a default CFtE custom, it is time to revisit the idea of whet her a single harmonized approach to cost allocation is really appropriate. We suggest that it most likely is not.
- Topic:
- Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment
24. Toward a multilateral framework for investment
- Author:
- Nicolle Graugnard
- Publication Date:
- 09-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- 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, Industrial Policy, International Trade and Finance, and Natural Resources
25. Are trade-law inspired investment rules desirable?
- Author:
- Marino Baldi
- Publication Date:
- 09-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Traditional bilateral investment treaties (BITs) focus on investment protection, i.e., regulate post-establishment aspects of foreign investment. In recent times, investment agreements have increasingly been supplemented with liberalization rules and also clauses on, e.g., key personnel, labor rights and sustainable development. Such integrated investment accords have notably become part of preferential trade agreements (PTAs). This trend started with NAFTA, continued with the negotiations on a Multilateral Agreement on Investment (MAI), and has in the course of the past ten years increasingly characterized PTAs throughout the world. The rapid proliferation of PTAs has, in the investment field, unfortunately led to lower quality provisions. Many of these treaties contain such wide-ranging exceptions and vaguely formulated safeguard clauses that their regulatory value as regards the protection of foreign investments in their post-establishment phase is called into question.
- Topic:
- Development, Economics, International Trade and Finance, and Foreign Direct Investment
26. Beware the discretionary choices of arbitrators
- Author:
- Gus Van Harten
- Publication Date:
- 12-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Investment treaty arbitration has unfolded rapidly in recent years. Some observations arising from analyses of arbitrator awards are high lighted below. They support broad conclusions that: arbitrators reviewed a wide range of legislative, executive and judicial decisions but typically did not exercise judicial restraint in various ways associated with domestic and international courts; arbitrators typically adopted expansive approaches to their authority and to investor entitlements to compensation, especially where the claimant had the nationality of a major Western capital-exporting state; and decision-making power was highly concentrated amongarbitrators, suggesting a need for closer scrutiny of how the most active individual arbitrators have expanded the meaning of investment treaties and corresponding principles of state liability.
- Topic:
- Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment, Law Enforcement, and Law
27. Lessons from South Africa's BITs review
- Author:
- Xavier Carim
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Proponents tend to argue that bilateral investment treaties (BITs) encourage investment and strengthen the rule of law particularly in jurisdictions where court systems are weak or biased against foreigners. This premise is contested. First, studies on BITs and FDI suggest the relationship is, at best, ambiguous and that BITs are neither necessary nor sufficient to attract FDI. Indeed, South Africa receives FDI from investors in countries with whom it has no BIT and often little or no FDI from others where a BIT was in place.
- Topic:
- Security, Economics, Emerging Markets, International Trade and Finance, and Treaties and Agreements
- Political Geography:
- Africa and South Africa
28. Go out and manufacture: Policy support for Chinese FDI in Africa
- Author:
- Nikia Clarke
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Energy investments and infrastructure contracts remain prominent in China's Africa engagement. However, investment in manufacturing makes up a significant proportion of Chinese outward foreign direct investment (FDI). Its characteristics–large numbers of smaller transactions by privately owned small and medium-sized firms–make these flows difficult to assess or control. However, China and African governments have an interest in effectively channeling this type of FDI.
- Topic:
- Development, Economics, Industrial Policy, International Trade and Finance, Markets, and Foreign Direct Investment
- Political Geography:
- Africa and China
29. Inward FDI in the United States and its policy context
- Author:
- Lucyna Kornecki
- Publication Date:
- 02-2013
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Inward foreign direct investment (IFDI) represents an integral part of the United States (U.S.) economy, with its stock growing from US$ 83 billion in 1980 to US$ 3.5 trillion in 2011. The United States, which had earlier been primarily a home for multinational enterprises (MNEs) rather than a host for affiliates of foreign MNEs, has become a preferred host country for FDI since the 1980s. Foreign MNEs have contributed robust flows of FDI into diverse industries of the U.S. economy, and total FDI inflows reached US$227 billion in 2011, equivalent to 15% of global inflows, the single largest share of any economy. Inflows of FDI, with a peak of US$ 314 billion in 2000 and another of US$ 306 billion in 2008, have been an important factor contributing to sustained economic growth in the United States. The recent financial and economic crises negatively impacted FDI flows to the United States and opened a period of major uncertainty. The effectiveness of government policy responses at both the national and international levels in addressing the financial crisis and its economic consequences will play a crucial role for creating favorable conditions for a rebound in FDI inflows.
- Topic:
- Economics, Human Rights, International Trade and Finance, Foreign Direct Investment, and Governance
- Political Geography:
- United States and North America
30. EU investment agreements and the search for a new balance: A paradigm shift from laissez-faireliberalism toward embedded liberalism?
- Author:
- Catharine Titi
- Publication Date:
- 01-2013
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- In July 2012, in an internal document, the European Commission's Directorate-General for Trade suggested that future EU investment agreement s (EUIAs) should incorporate regulatory flexibility in the same way in which EU free trade agreements (FTAs) safeguard parties' policy space. Since it is expected that a number of treaties on the EU's negotiating agenda will be concluded in the near future, and given the policy shift that has already taken place in Canada and the US, it is time to start thinking about a new balance in a move away from investment treaties' traditional laissez-faire liberalism toward WTO law's embedded liberalism, a model whereby liberalization is embedded within a wider framework that enables public regulation in the interest of domestic stability.
- Topic:
- Economics, Globalization, International Trade and Finance, World Trade Organization, and Foreign Direct Investment
- Political Geography:
- Europe and Canada