unctad.org | THE REIO EXCEPTION IN MFN TREATMENT CLAUSES
THE REIO EXCEPTION IN MFN TREATMENT CLAUSES
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UNCTAD Series on International Investment Policies for Development
Full Report ( 92 Pages, 518.0 KB )

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The possible effects of a regional economic integration organization (REIO) exception in international investment agreements (IIAs) is an issue that has arisen in the context of bilateral, regional and multilateral arrangements. Such a provision excludes the applicability of the principle of most-favoured-nation (MFN) treatment with regard to preferential treatment that members of a REIO grant other REIO members and their investors. While REIO members defend this clause as indispensable for the pursuit of their internal investment policies, including possible future integration measures, non-REIO countries are concerned that it might undermine the principle of non-discrimination as one of the essential rights in IIAs. In particular, developing countries may be concerned about the particular effects of such an exception upon their ability to benefit from membership of IIAs.

This paper, examines the issue of REIO exceptions in IIAs and its possible effects, in particular with regard to developing countries. It is part of a new Series on International Investment Policies for Development, which builds on, and expands, UNCTAD´s Series on Issues in International Investment Agreements. Like the previous one, this new series is addressed to Government officials, corporate executives, representatives of non-governmental organizations, officials of international agencies and researchers.


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