“Investment agreements should be designed to promote inclusive development, which can create sustainable sources of productive employment, a big challenge for the poor world”.
This was the main message of the World Investment Forum’s session on International Investment Agreements (IIAs) organized here today on the sidelines of UNCTAD XIII. The Conference was chaired by Anabel González, Minister of Foreign Trade, Costa Rica and included distinguished speakers from the governments including regulatory and investment promotion agencies, private sector, academics and CSOs. James Zhan, Director UNCTAD Division on Investment and Enterprise emphasized the role of investment for sustainable and inclusive development in his opening statement.
Jonathan Kallmer, Deputy Assistant US Trade Representative said that the IIAs should provide opportunities to stakeholders and advance the objectives of development. He also favoured policy space in IIAs for regulation in public interest. These views were shared by several other speakers.
The speakers were of the view that there is a need to focus on core things that parties desirous of entering into an investment agreement agree to instead of making it unnecessarily complex by incorporating contentious issues.
Some speakers wondered whether Bilateral Investment Treaties (BITs) create stable environment for investment, whether BITs can lead to more FDI flows, whether they are a means to promote economic governance, and also whether countries need BITs, given the fact that many developing countries are getting FDI inflows from countries with whom they do not have any investment agreement.
On the other hand, some speakers advocated for making the IIAs more comprehensive in scope and coverage by including issues like competition policy, intellectual property, environmental protection regulations, legal framework for managing capital risks, public health and safety, employment conditions and worker’s rights, among others, under their ambit.
Luzius Wasescha, Ambassador of Switzerland to WTO and EFTA commented that the IIA regime in some respects is even stronger than the international trade regime. He also argued that IIAs should not constrain domestic policy space and that home countries have a role to play for better balancing the rights and obligations of investors.
Mark Halle, Director, Trade and Investment, and European Representative, IISD, Switzerlandfurther argued that risks associated with already existing old generation BITs need to be reduced. “BITs should be based on a new model which is more broad-based and grounded on the principles of sustainable and inclusive development”.
Pradeep S Mehta, Secretary General CUTS International, emphasised in his statement that the concept of sustainable development should not be confined to environment alone as it also has two other equally important pillars, i.e. economy and equity. The three together define a comprehensive concept for balanced and inclusive development. According to him IIAs should be designed and implemented based on this comprehensive concept of sustainability.
Mehta also proposed a possible work agenda for UNCTAD Division on Investment and Enterprise. This should include: revisiting the old discussions on drafting and adopting UN Guidelines for TNCs, so that corporate behavior is better regulated.
He added that the UNCTAD should also carry out analysis of existing BITs to determine their pros and cons; developing, in collaboration with other relevant inter-governmental and non-governmental organisations, best practices and principles for a model BIT that promotes inclusive and sustainable development; and assisting developing countries negotiate better BITs.
The emerging consensus at the Conference was that developing countries should focus on building their capacities to negotiate BITs and IIAs that further their own development objectives.
For more information, please contact:
Kshitiz Sharma, Assistant Director CUTS International, +974-55004828 (Doha, Qatar), firstname.lastname@example.org