Julien Chaisse

Do Bilateral Investment Treaties Promote Foreign Direct Investment

Abstract The future of the international investment regime is rapidly evolving and many different kinds of investment treaties are now being negotiated. In particular, the EU, which is emerging as a new actor on the scene of international Foreign Direct Investment (FDI) policy will need to know what kind of FDI-related provisions it should favour. We argue that much can be learned from the substance of existing Bilateral Investment Treaties (BITs) as differences in legal provisions of BITs are crucial regarding the application of BITs in praxi. Therefore, this paper presents a new methodology to measure the effect of the essential legal provisions of BITs. Starting from a review of 40 empirical studies, the (heterogeneous) empirical results of the effects of BITs on FDI are summarized. In the conceptual part of this paper, the most important legal substantive criteria as well as the key technical features of BITs are identified together with their variants. These are the components of new BITSEL index.

Deconstructing Service and Investment Negotiating Stance: A case study of India at WTO GATS and Investment Fora

While India has gradually embraced a unilateral liberal policy on the limit of inward foreign investment in the country, its negotiating position on the same at the multilateral forum, i.e., WTO, is still comparatively defensive. The key question raised by the current analysis is, whether India is right to adopt a hard negotiating stand at WTO on investment issues, covered under GATS Mode 3 and Trade and Investment Negotiations. An associated concern is whether a softening of India’s present standpoint is expected in coming future. For this purpose, the current study explores the long-run co-integrating relationship between India’s FDI and economic growth, in addition to exploring their direction of causality applying Granger causality test. The obtained empirical results lead to the following observations. First, regarding the question of the justifiability of the Indian standpoint, it is observed that though foreign investment inflow in the country continues to benefit several sectors through backward and forward linkage effects, the role of FDI on overall growth has not been statistically significant. Second, it can be concluded from the findings of the Granger causality test that a number of foreign investors has targeted India in recent period, given the high growth rate witnessed by Indian economy even in the aftermath of the 2009 recession vis-a-vis other developing economies. We conclude that India’s present standpoint at WTO negotiations on investment reflects the uncertain trade-off between growth repercussion expectations from the incremental FDI inflows resulting from the additional multilateral commitments. Therefore, a quick transformation of the present negotiating standpoint is not expected in India’s case.

Competitiveness of the ASEAN Countries

In an age of increased necessity for competitiveness of nations and at a time when the world economy is facing recession, this book explores the possible trajectory of ASEAN – arguably one of the most dynamic areas in the world – as a regional economic and political bloc. The expert contributors address the industrial competitiveness of ASEAN and analyse the role of MNEs against the background of the challenges of integration. They illustrate that regional integration will only be a success if ASEAN’s linkages are broadened with global partners through negotiations of Free Trade Agreements. The book concludes that although much still remains to be done, and many promises are still to be unveiled, ASEAN’s ‘coming of age’ is an historic milestone.

The Evolving and Multilayered EU-India Investment Relations - Regulatory Issues and Policy Conjectures

India and several EU member countries share a rich history of investment collaborations. The collaboration has been cemented with several formal agreements with individual EU members, and the recent negotiations with the trade bloc since June 2007 on a broad‐based Bilateral Trade and Investment Agreement (BTIA) can be considered as a culmination of this process while ongoing WTO negotiations on Mode 3 commitments remain essential in terms of market opening. The present article analyzes the multi‐layered regulation of foreign investment against the backdrop of the evolving EU‐India economic relations. The 2009 Treaty of Lisbon gave a new competence to the EU which will impact ongoing negotiations with India whose global standing has been significantly changing in recent years. The economic vibrancy, coupled with large market size, has earned India greater relevance in several international forums, thereby making the future EU-India investment treaty one of the most promising investment agreements.

Identifying Mutual Interest Areas at WTO

China and India, in spite of being signatory members of GATT (General Agreement on Tariffs and Trade, 1948), witnessed a dissimilar experience in the arena of multilateral negotiations and trade. China lost its membership after the withdrawal of Taiwan from GATT in 1950, but gained steady access in the global market since the late 80s. India, on the other hand, in spite of maintaining the membership of GATT, never focused on export promotion strategies before late 80s. Both the countries expect further growth in their exports in coming future, as the tariff and non-tariff barriers (NTBs) in member countries are likely to go down in the post-transitory phase of the World Trade Organization (WTO), which started from 1 January 2005 onwards. However, the WTO-compatibilities of several domestic policies of both China and India have been questioned by their trade partners on various occasions and the debate is likely to continue in the future. Moreover, the exports of both of them are subject to various NTBs in principal markets, which are likely to intensify in the coming days. This bears serious implications on the export potentials of the two countries. Considering the domestic policies of China and India as well as the barriers on them, this article attempts to identify material and institutional areas where the two countries could jointly negotiate at the multilateral forum. It argues that collective bargaining by the two countries on key issues is likely to provide them an edge in future negotiations.

EU-India Bilateral Trade and Investment Agreement: Opportunities and Challenges

India has a long history of economic linkages with the EU member states. In recent period, the volumes of Indo-EU trade both in case of merchandise products and services have considerably increased and a number of investment collaboration opportunities are emerging. Since 2007 the two sides are engaged in the negotiations on concluding a Bilateral Trade and Investment Agreement (BTIA), which is expected to augment the present level of economic exchange further. Once completed in coming months, the BTIA will be the biggest trade agreement involving India, surpassing its earlier RTA with the ASEAN countries. However, while EU and India can collaborate in several spheres, the potential conflict of interest may not be uncommon either. In particular, the provision of farm subsidies offered by the EU to local producers, imposition of anti-dumping measures on several Indian export categories in EU markets, barriers on movement of professionals, EU interest in inclusion of several WTO-Plus provisions in the agreement etc. are among the concern areas of India. By looking at the trade data and the negotiating dynamics, the present analysis attempts to understand the challenges and opportunities for India in the EU market. The paper concludes that India needs to focus on augmenting its competitiveness for benefiting from the integration exercise.

Ten as One? Explaining ASEAN Regulation on Foreign Investment

This chapter discusses the role of the ASEAN Comprehensive Investment Agreement (ACIA), which is one of the most important legal documents in the formation and functioning of the ASEAN Economic Community (AEC), especially from the perspective of the regionalisation of investment law and policy in the Asia-Pacific region.

The Future of Investor-State Arbitration: Revising the Rules?

The last two decades have seen a remarkable growth in the number of investor-state disputes. Asia itself has witnessed a startling number of investment disputes. Overall, about 21% of all known investment disputes involve Asian states. Several authors predict an increasing number of disputes involving Asian actors in the future. While arbitration remains the preferred dispute resolution mechanism for resolving investor-state disputes, a number of Asian states have expressed discontent with the investment arbitration system. A few States have denounced investor-state arbitration entirely, while others have significantly reformed the dispute resolution provisions in their investment agreements. The EU, Canada and, in Asia, Vietnam have altogether dispensed with the inclusion of “traditional” investor-state arbitration in their investment agreements. In this tumultuous scenario, with Asia witnessing record foreign investment inflows and outflows, it is timely to review the current trends and recent developments in the investment arbitration framework and consider their effects on both Asian states as well as Asian investors. After explaining the current investment treaty and investment arbitration framework, this Chapter examines current trends and concerns in investment arbitration as relevant to the Asia-Pacific region. It reviews several recent developments in investment arbitration—from resolving the common concerns with investment arbitration on a piecemeal basis to a wholesale replacement of the current system—and examines their reception in Asia. It concludes that Asia has seen a considerable evolution (and, perhaps, maturity) in its international investment agreement framework, which bodes well for the region. Several international developments are likely to impact the investment arbitration framework in Asia, and it would be ideal to adapt them to the Asian context.

International Investment Treaties and Arbitration Across Asia

International Investment Treaties and Arbitration Across Asia examines whether and how the Asian region has or may become a significant ‘rule maker’ in contemporary international investment law and dispute resolution, focusing on the ‘ASEAN+6’ economies.

International Investment Treaties and Arbitration Across Asia: A Bird’s Eye View

International Investment Treaties and Arbitration Across Asia examines whether and how the Asian region has or may become a significant ‘rule maker’ in contemporary international investment law and dispute resolution, focusing on the ‘ASEAN+6’ economies.