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Home arrow Research Projects arrow IP11 - Investment arrow Project Description
Project Description Print

The internationalization of production has been one of the major features of the world economy since the mid nineteen-eighties. Advances in information communications technology and the accelerated pace of international distribution in recent years have promoted the growth of foreign investment which divides the various processes of research and development (R&D), procurement, production, manufacturing and sales, etc., across a number of countries.

I
t is estimated that there are now 65 000 multinational enterprises (MNEs) worldwide, 90 per cent of which have their headquarters in Organisation for Economic Co-operation and Development (OECD) countries. They have established more than 850 000 foreign affiliates, more than half of which operate in non-OECD countries. Foreign affiliates now account for about one-third of world exports, and another one-third of world trade flows are between MNEs. Trade policy and investment policy have had a strong mutual influence with a substantial impact on trade, investment and economic growth.

The worldwide economic integration is not being achieved via expansion of international trade and Foreign Direct Investment acting as separate channels, but rather as two interrelated phenomena that act together and reinforce one another. The synergy effect of trade and investment expansion should open the way for further world economic growth.

International investment law is one of the fastest-growing areas of international law. Treaties, bilateral, regional and plurilateral, have increasingly become the basic source of international investment law. At the same time, new cases are being lodged at an exponential rate. Yet, even if the network of Bilateral Investment Treaties (BITs) is expanding it is still heavily one-sided. They are mainly agreements between developed and developing countries.

There are more than 2500 BITs and more than 230 regional trade agreements (RTAs) governing much of the direct investment flow between countries. Yet, although foreign direct investment (FDI) is clearly global, it is not covered by comprehensive multilateral rules.

Although many of these agreements are similar, this situation has nevertheless resulted in an increasingly complex international setting for international investment in which governments have to ensure consistency between differing sets of obligations. Furthermore, many investment agreements promote closely-related concepts but use different wording. This has resulted in divergent interpretation of the rules and fragmentation poses a very real problem.

At present, economic agents and governments lack a comprehensive instrument to deal with the main principles of the World Trade Organization (WTO) such as transparency, the most-favoured-nation principle and non-discrimination both in the pre-establishment and post-establishment phases of MNEs.

The goal of IP11 is to consider these issues both from an academic point of view and to provide input to national and international institutions. A substantial contribution will be made to an important topic by studying and improving knowledge in several areas that are crucial to the elaboration of multilateral rules governing the future of global FDI flows. The four main corners of the research are:

  • investment rules to be developed at the multilateral level;
  • relationships between international trade rules and FDI rules;
  • multinational enterprises;
  • and international competitiveness of countries.


 



Focus of individual researchers




  • Prof. Dr. Philippe Gugler
    Role of FDI on competitiveness; role of FDI in the emergence and development of clusters FDI, trade and competitiveness – differentiation regarding types of country.


  • Dr. Julien Chaisse
    Trade and investment law; European Common Commercial Policy; EU and ASEAN integration; international business law.


  • Bertram Boie
    Trade and investment law; European common commercial policy; European BITs; China.



 
















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