Foreign Investment Issues and WTO Law - Dealing with Fragmentation While Waiting for a Multilateral Framework

Abstract:     
This paper explores the provisions affecting investment in the existing WTO obligations. Worldwide economic integration is not being achieved via expansion of international trade and FDI acting as separate channels, but rather as two interrelated phenomena that act together and reinforce one another. The previous failures to establish a multilateral framework for investment combined with the increasing volume of investment and the corollary need for regulation lead back to the existing regulation of investment within WTO. The WTO handles two major agreements that address investment directly: the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIMs). The Agreement on Trade-Related Aspects on Property Rights (TRIPS) provides protection for intangible assets that form the basis of the activities of multinational corporations. WTO investment provisions are however limited in scope and lack coherence. Based on the findings, the policy lessons for future prospects are drawn notably on the GATS form a multilateral agreement on investment could adopt.

Keywords: trade, FDI, WTO

JEL Classifications: F02, F13, F23

Accepted Paper Series