Balancing the Domestic Regulatory Need to Control the Inflow of Foreign Direct Investment Against International Treaty Commitments: A Policy-Oriented Study of the Korean Foreign Investment Promotion Act and the Korea-US FTA

Abstract

Capital-importing countries enact foreign investment laws that protect and promote foreign investments, but those commitments may be unilaterally withdrawn if the country is not obliged by an international investment agreement (MJA). A host state that has entered into an HA is constrained in enacting domestic legislations affecting FDI only to the extent reserved for in the IIA. This preliminary analysis aims to facilitate understanding of the limitations that a country inevitably encounters when trying to maintain domestic regulatory lexibility while complying with its obligations under HAs.