Foreign Investment Promotion Research Articles

The Sino-Canadian Foreign Investment Promotion and Protection Agreement - Presentation and Challenges

China and Canada have, over the past decades, collaborated on many different fields including political, economic, cultural, scientific and academic matters. The establishment of a common framework for investment seems to be nothing but a logical and strategic step towards further collaboration between the two countries in the future. A Bilateral Investment Treaty has therefore been signed the 8th of September 2012 on the margins of the Asia Pacific Economic Cooperation (APEC) Leaders’ Meeting in Vladivostok, Russia, after nearly 20 years of negotiation. Canada stated having secured a high-standard agreement with comprehensive scope and coverage. This paper seeks to present the main provisions of this treaty as well as its implications and challenges for Canada’s economy.

라오스의 외국인투자법제 및 조림사업 허가 절차에 관한 고찰

The purpose of this study is to review the laws on foreign investment and the changed licensing procedures in Laos and to provide the data for basic understanding of foreign forestation investment in Laos. The conclusions are as follows. The Laos government has been consistently trying to promote foreign investment. In particular, in 2004, the 「Law on the Promotion of Foreign Investment」 was legislated. In 2009, the Foreign Investment Promotion Act and the Domestic Investment Promotion Act to incorporate the principles of the 「Law on Investment Promotion」 were enacted. In Laos, the country’s land is owned by the nation’s community and maintained by the government. Therefore, through the procedures for registration of land, land can be conceded or leased. The ways to invest are joint ventures (where at least 10% of the total capital investment has to be made), foreign sole investment (where the investor must have a minimum capital of $100,000 or more), joint venture agreement and etc. Lastly, the forestation licensing procedures in Laos are carried out in the following order: site selection, business investments feasibility studies, environmental and social impact assessment, forestry permit application.

The Energy Charter Treaty and China: Member or Bystander?

The security of energy investment is becoming an increasingly important factor for China’s harmonious economic development. Without a specific agreement concerning the protection and promotion of foreign energy investment between China and other states, to utilize the Energy Charter Treaty would be a better and feasible choice. This study will first present a brief overview of the legal protection of China’s OFDI, followed by an overview of investment protection and promotion under the ECT, and then it assesses the positive implications of China being a member state of the ECT together with the potential risk. A comprehensive discussion illustrates that accession will be a desirable result for China. Finally, it goes further to proclaim that an Asia-Europe Energy cooperation legal framework will be on its way provided that China enters into the ECT.

International Tax Treaty Policy in Colombia

In 1990, Colombia started a process of liberalization through which the traditional scheme of 'production towards domestic necessities' was left behind. In consequence, reforms in the tax, financial, foreign trade and constitutional systems took place. These reforms aimed at removing obstacles for investment and reinforcing the capital market influencing the domestic and international tax policy in Colombia. Up till recently (2005), Colombia did not conclude double taxation conventions ('DTCs'). The only treaties signed by Colombia prior to 2005, were for instance international tax agreements with regard to air and maritime transportation. Up till 2005, in bilateral and multilateral relations, the reference to tax provisions was left to provisions in regional trade agreements. In Colombia, in the context of the Latin American process of integration, taxation is influenced by the regional agreements of which Colombia is member. Since 2005, Colombia decided to start concluding DTCs mainly due to several factors such as: the objectives of promotion of Colombian products and the promotion of foreign investment included in the two National Plans of Development for Colombia (2003-2006 and 2006-2010). These objectives resulted in the negotiation of DTCs and in the negotiation of bilateral investment treaties (acuerdo de promocion y proteccion reciproca de inversiones). At the time of writing (April 2008), Colombia has concluded DTCs with Spain, Chile, and Switzerland. DTC negotiations have been concluded with Canada. Bilateral investment treaties have been concluded with Peru, Spain and Switzerland. This paper discusses the changes in the international tax treaty policy in Colombia since the process of liberalization in 1990 and it covers the developments in DTC's in the period between 2005-2008. This paper was presented at the international conference: History of Double Tax Treaties organized by the University of Vienna of Economics and Business.

Study on the relationship between construction land expansion and economic growth pattern in the Pearl River Delta

In this study,we use three scenes of Landsat Thematic Mapper(TM) images,including those of 1988,1998 and 2006,to detect the expansion of construction land in the Pearl River Delta.Meanwhile,we analyze the economic growth pattern of the region by the input-output analysis of the primary factors and the production organization analysis.Based on it,we conduct research on the interaction between the construction land expansion and the economic growth pattern in the Pearl River Delta,using the quantitative analysis. The result shows that the Pearl River Delta's economic growth presents a typical extensive and export-oriented growth pattern,which relies on a large number of primary factors affecting production inputs and the promotion of foreign investment to achieve rapid economic growth.This pattern reflects the characteristics which is called high input,high consumption,high output and export-orientation. For the relationship between the extensive growth pattern and the construction land expansion,there is exponential correlation between the input-output coefficients and the land use efficiency.With the rise in input-output coefficients,the efficiency of construction land drops down exponentially.For the relationship between the export-oriented growth pattern and the construction land expansion,although the extent of the export-oriented economic growth will not affect construction land expansion,the foreign capital flows play an important role in guiding the expansion of construction land while production organization mode of export-oriented will also reflect the distribution and morphology of construction land directly. In fact,both the phase change and the spatial feature of the construction land of the region such as site factor pointer,small towns pointer and decentralization and inefficiency are closely related to the economic growth pattern.Thus,there is a causal link between construction land expansion and economic growth pattern.They promote each other and constitute the land-economy interactive system.Only when we change the economic growth pattern while optimizing the allocation of land resources,could we establish the positive interactive relationship between land and economy,and achieve sustainable economic growth and utilization of land resources.

Trade, Investment and Risk

Since the North American Free Trade Agreement (hereinafter NAFTA) was successfully negotiated in 1993, the provisions for investor-state arbitration under its Chapter 11 have put pressure on the regulatory spaces of the State Parties. Under Chapter 11, any investor alleging a breach of the treaty norms by a host State can file an arbitration claim. This diagonal dispute settlement mechanism has determined a growing stream of arbitrations, focusing inter alia on the interplay between the regulation of toxic chemicals by the host State and the substantive provisions of Chapter 11. The arbitration claims filed by investors against host States regarding the regulation of toxic chemicals by the latter include those related to the adoption of discriminatory policies, the expropriation of investments and the violation of the fair and equitable standard (FET). In a nutshell, the question is how to reconcile environmental protection with the promotion of foreign direct investment (FDI). Can the host State adopt precautionary policies? To what extent can and should policy influence risk regulation? Should investors be compensated if their toxic chemicals are banned from the market? Which standard of review should arbitral tribunals adopt to assess scientific evidence? This note explores all of these issues through an analysis of the Chemtura award.

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

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.

Valstybinės politikos taikymo tiesioginėms užsienio investicijoms pritraukti teorinės įžvalgos

This article critically examines the concepts of public policy in respect of foreign direct investment. The analysis of the concepts of public policy identifies two main theoretical approaches to the promotion of foreign direct investment, namely – the liberal, and the regulatory one. A regulatory policy is a matter of fierce dispute, which in some cases creates a negative perception of a country. Thus, the intensity of investment of a host country is declined. This article also introduces some specific attitudes towards the intervention of a state. A liberal government policy on foreign direct investment is widely applied all over the world. However, nowadays more and more countries tend to switch from the liberal government policy to the regulatory one. Therefore, this article discusses the main causes of this phenomenon. The benefit of the regulatory policy towards FDI is emphasized.

European/Southern African Development Community (SADC) states' bilateral investment agreements (BITs) for the promotion and protection of foreign investments vs post‐apartheid SADC economic and social reconstruction policy

PurposeThis article aims to examine the sustainability of European and SADC states' practice of agreeing bilateral investment agreements (BITs) for the promotion and protection of foreign investments in light of the latter's recent inauguration of Black Economic Empowerment (BEE) as a basic norm of regional customary international law and strategy for countering the social and economic legacy of apartheid rule on their territories for over half a century.Design/methodology/approachThe approach taken is textual analysis and deconstruction of emergent SADC BEE legislation, substantive BIT legislation provisions, dispute settlement mechanisms and emergent jurisprudence on the tensions between BEE policy and BIT obligations.FindingsThe strong elements of exclusivity between European/SADC BIT dispute settlement mechanisms on the one hand, and the “ouster clauses” of SADC BEE legislation and regulations on the other, are mutually incompatible. This incompatibility threatens the sustainability of the EU/SADC states' BIT dynamic for the promotion and protection of foreign direct investments (FDIs).Originality/valueDemonstration of BEE as SADC's emergent basic norm of social reconstruction for countering the social and economic legacy of apartheid rule in affected states and implications of that for EU/SADC policy on the promotion and protection of FDIs.

Apertura y reforma de la economía cubana : las transformaciones institucionales (1990-1993)

In 1993, the economic opening process of Cuba was consolidated, one of the components of the policy adopted by the government to face the worst economic crisis in recent decades. It is a process of partial economic reform that fundamentally encompasses three simultaneous and interrelated phenomena: the accelerated development of international tourism, the diversification of foreign trade and the promotion of foreign investment. In this paper we argue that what began as the selective opening of the Cuban economy has been transformed into a partial economic reform, characterized by important institutional modifications and oriented towards the market, capable of generating trends in its own evolution that could transform it into a broader economic reform with the potential to overcome the current dual nature of the Cuban economic system.

Promotion of foreign direct investments in Russia to improve the quality of economic growth

This paper provides a systematic overview of theoretical recommendations on how to stimulate the inflow of foreign direct investment (FDI). It presents the dynamics and breakdown of FDI in Russia. The authors use econometric analysis to assess the prevailing motives underlying FDI in Russia and other countries and formulate their recommendations on FDI stimulation policies for the coming decade.

FDI and Growth: What Cross-Country Industry Data Say

The theoretical literature has discussed different channels through which foreign direct investments (FDI) promote host country’s economic growth, but empirical analyses have so far been inconclusive. In this paper we provide evidence that FDI have a positive and statistically significant growth effect in recipient countries, using a panel of 14 manufacturing sectors for (a sample of) developed and developing countries over the period 1992 -2004. Moreover, we find that this effect is stronger in capital intensive and in technologically advanced sectors, highlighting the importance of sector characteristics. We find that the growth enhancing effect comes primarily from an increase in total factor productivity (TFP) and from capital accumulation. FDI not only contribute to physical capital accumulation, but also generate positive technological spillovers. Our results are robust to the inclusion of other determinants of economic growth. We also address the issue of potential endogeneity and results are confirmed. Policy implications of our findings are important, especially for developing countries, where the growth enhancing promotion of foreign investment in capital intensive and technologically advanced sectors is at the heart of the debate.

The Quest for Policy Space in a New Generation of International Investment Agreements

One of the most important challenges facing the international investment law regime today is how to strike a balance between principles regarding the protection and promotion of foreign investment on the one hand and principles regarding the protection of society and the environment on the other. A number of states have made significant progress towards meeting that challenge by adding interpretive provisions, general exceptions clauses and new preambular language to a new-generation of international investment agreements (IIAs). If the serious substantive and procedural questions they raise can be answered satisfactorily, these new treaties may go a long way towards saving the international investment law from the legitimacy crisis it is currently experiencing. Oxford University Press 2010, all rights reserved, Oxford University Press.

The Right of Foreign Investors to Access German Markets: The Meaning of Article 2(1) of the German Model Treaty for the Promotion and Protection of Foreign Investments

The Right of Foreign Investors to Access German Markets: The Meaning of Article 2(1) of the German Model Treaty for the Promotion and Protection of Foreign Investments

Outward FDI from Canada and Its Policy Context

Canada was a major net importer of foreign direct investment (IFDI) prior to 1996. The stimulus for the surge in Canada's outward FDI (OFDI) came from profitable investment opportunities abroad. Canada has significantly diversified its OFDI away from the United States over the past 20 years. The financial crisis significantly affected Canada's FDI outflows, but OFDI seems to have rebounded in the second half of 2009. While Canadian investment has historically gone mainly to developed countries, recent changes in government policies seem to suggest that Canada is looking to build closer ties with developing countries as well. Canada has a longstanding commitment to multilateral cooperation and actively supports the World Trade Organization (WTO) framework as a way to promote international trade and investment. At the same time, Canada continues actively to negotiate foreign investment promotion and protection agreements (FIPAs).

Harnessing globalization: the promotion of nontraditional foreign direct investment in Latin America

Harnessing globalization: the promotion of nontraditional foreign direct investment in Latin America

Foreign factors in Taiwan's economic transformation

This paper aims to explore the foreign influences on Taiwan's economic transformation over the past 40 years. While exports have always been important in sustaining Taiwan's economic growth, the driving force behind exports has changed from inward investment to outward investment. The analysis carried out is from an international political economy perspective and takes a historical overview. It argues that the US, Japan and China pursued economic policies based on their own economic interests. These foreign governments’ economic policies together with their entrepreneurs’ business interests are the more important variables for shaping Taiwan's economic structure. During the 1960s, without the US's financial guarantees for American MNCs and security guarantees for the island, the KMT's foreign investment promotion policy would not have been as successful as it was when Taiwan faced a military threat from China. The US and Japanese economic policies changed, and since the 1970s competition between their businesses in the world market has integrated Taiwan into a regional production network. Subsequent to the Sino-US rapprochement, the US gradually opened up its market towards China. With America's rising trade barriers against Taiwanese-made products, Taiwanese entrepreneurs found profits by investing in China. Even though the Taiwanese Government tried hard to pull back the mounting outward investment in China, it was unable to achieve it. In contrast to the traditional point of view, this paper offers insights into the economic interaction between first the US and Japan and later between the US and China that resulted in Taiwan's economic transformation.

Note on the Yearbook on International Investment Law & Policy 2008-2009: Foreign Investment Promotion and Protection vs. Host States' Regulatory Powers

Note on the Yearbook on International Investment Law & Policy 2008-2009: Foreign Investment Promotion and Protection vs. Host States' Regulatory Powers

The Protracted Bargain: Negotiating the Canada–China Foreign Investment Promotion and Protection Agreement

SummaryIn 1994, Canada and China began negotiating a bilateral foreign investment promotion and protection agreement (FIPA). After sixteen years and multiple rounds of negotiations, the two states have not been able to solidify a workable treaty. By examining each country’s substantive and procedural preferences in their respective bilateral investment treaty models and in past treaties, this article outlines some of the likely “on-the-table” obstacles in the negotiating process. The analysis indicates that there are areas of considerable convergence between each country’s preferences, although significant areas of divergence exist on some key issues. Further confounding the disagreement that exists between the two countries are “off-the-table” factors such as general bilateral relations. One further aspect that is considered is the idea of coordinating compliance between international trade and human rights norms in the context of the Canada–China FIPA. While bilateral investment treaties are economic agreements, pronounced non-economic elements shape the practical and legal effect that these treaties have on various affected actors. Despite the important implications the Canada–China FIPA has for human rights and environmental policy concerns, it can be inferred that these factors will have little bearing on the actual negotiated outcome of the agreement.

The International Centre for Settlement of Investment Disputes (ICSID): An Empirical Research on the Voting Behavior of Arbitrators

After 145 ratifications and hundreds of disputes, the International Centre for Settlement of Investment Disputes (ICSID) conceived by the International Bank for Reconstruction and Development (World Bank) for the promotion of foreign direct investment (FDI) has been under severe debate. While scholars have already focused on the outcome of international investment arbitration to address its independence and neutrality, the voting behavior of arbitrators remains amorphous. The ICSID arbitration is particularly interesting to appraise because its default system avoids the appointment of arbitrators of the same nationality of those of the parties and because it was designed to deal with conflicts not directly involving two states, but a host state and a foreign investor, unlike the traditional structure of international courts, as for example at the International Court of Justice (ICJ) and at the Word Trade Organization (WTO). This paper aims at testing two main hypotheses. Firstly, whether or not arbitrators favor the interest of the parties that select them and, moreover, if the interests of the home-state of arbitrators influence their votes in order to favor parties with similar characteristics, as to wealth, culture (religion, language and legal system), region and democratic level. Secondly, whether or not arbitrators split the differences of the parties’ interest, reaching compromised awards.