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Report provides outlook for the evolution of International Investment Rulemaking

09 February 2009

Geneva, 10 February 2009 - International Investment Rule-making : Stocktaking, Challenges and the Way Forward (1) will be launched today at the Multi-year expert meeting on investment for development. This report provides a comprehensive review of sixty years of international investment rulemaking and identifies main trends in current treaty practice. It also identifies the core characteristics of the existing universe of international investment agreements (IIAs) at the beginning of the 21st century and the main challenges arising thereof, and provides a brief outlook concerning the future evolution of the IIA universe.

Today, the network of IIAs has expanded to encompass more than 5,700 different agreements, with almost every country in the world being part to at least one of the bilateral investment treaties, double taxation treaties and other international agreements with investment provisions (such as free trade agreements and economic cooperation agreements) that make up this system. The universe of IIAs has not only grown in numbers, but also in complexity. Agreements increasingly overlap, as they are concluded at the bilateral, regional, inter-regional, sectoral, plurilateral and multilateral level. And they become more multifaceted, as they cover not only investment issues per se, but also related issues such as trade, services, intellectual property, industrial policies, labour issues, movement of personnel, environmental concerns, and others.

In the absence of a global body administering the process, international investment rulemaking lacks system-wide coordination, and countries continue to conclude investment treaties on an individual basis, thereby further perpetuating and accentuating the existing IIA patchwork - the so-called "spaghetti bowl".

While these developments offer important opportunities, the increasingly complex and rapidly evolving IIA universe also poses major challenges for States and firms alike. The challenges for firms include keeping track of latest developments in international investment rulemaking and effectively taking advantage of them in their business planning and operation, as well as in maintaining good relations with their host countries. The challenges for countries include keeping the treaty network consistent and transparent, and - above all - formulating the "right" agreements in terms of balancing the interests of host countries, home countries and foreign investors, as well as strengthening the development dimension.

The report warns that there is a risk that the IIA system could eventually degenerate into an increasingly non-transparent hodgepodge of diverging rules that countries, especially capacity-constrained developing countries, find more and more difficult to cope with. This underlines the importance of continued collective efforts to make the existing system of international investment rules function more effectively and efficiently, in order to make it more conducive to growth and development.

The multi-year expert meeting on investment for development that opened today will discuss the development dimension of IIAs, and will address some of the issues identified in the report. More than 140 experts from government, academia, private-sector and civil society, North and South, will also consider the way forward and the possibility of formulating pragmatic policy instruments for addressing the systemic challenges posed by the current system of IIAs.

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1.The International Investment Rule-Making: Stockating, Challenges and the Way Forward (Sales No. E.08.II.D.1, ISBN: 978-92-1-112731-7) may be obtained from United Nations Sales Offices at the below-mentioned addresses or from United Nations sales agents in many countries. Price: US$ 15 (50% discount for residents in developing countries and a 75% discount for residents in least developed countries). This includes the book and the CD-ROM. Customers who would like to buy the book or the CD-ROM separately, or obtain quotations for large quantities, should enquire from the sales offices. Residents of countries in Europe, Africa and West Asia may send orders or inquiries to: United Nations Publication/Sales Section, Palais des Nations, CH-1211 Geneva 10, fax: +41 22 917 0027, e-mail: unpubli@un.org; and those from the Americas and East Asia, to: United Nations Publications, Two UN Plaza, DC2-853, New York, N.Y. 10017, U.S.A., telephone: 1 212 963 8302 or 1 800 253 9646, fax: 1 212 963 3489, e-mail: publications@un.org. Internet: http://www.un.org/publications

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