Integrating Sustainable Development into International Investment Agreements

A Guide for Developing Country Negotiators

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As International Investment Agreements (IIAs) continue to evolve and become increasingly complex, a key challenge for developing countries is how to maintain coherent investment obligations that are consistent across any overlapping treaty provisions. An even greater challenge is the effective negotiation of trade in services and investment commitments in Preferential Trade Agreements to make foreign investment supportive of development.

This guide is designed to assist developing countries to negotiate IIAs that are more effective in promoting their sustainable development. It identifies and consolidates emerging best practices from existing treaty models, evaluating the costs and benefits of different approaches; suggesting new and innovative provisions to encourage foreign investment flows; and outlining how states can achieve coherence among their IIAs.

A useful reference tool for developing country negotiators and interested parties, including investment promotion agencies, policy-makers, legislative drafters and officials in government legal departments.



Investment Promotion and Technical Assistance

As noted in the review of the empirical literature,1 evidence of the impact of IIAs on increasing investment flows into party states is weak. It may seem surprising, therefore, that a recent study by UNCTAD found that only a small minority of existing IIAs contain specific investment promotion provisions.2 Agreements addressing the promotion of investment do so in a variety of ways, including committing parties to some of the categories of measures listed in Box 8.1. In general terms, investment promotion efforts involve some combination of measures to: (i) improve the host state’s regulatory framework by making it more transparent and efficient, and less burdensome for investors; and (ii) facilitate investment by means such as incentives, information dissemination and the activities of investment promotion agencies.


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