Commission on Investment, Technology and Related Financial Issues, Seventh session

The Commission´s work is aimed at identifying which national policies are the most important for increasing the benefits from foreign direct investment (FDI).Many countries are engaging in fierce competition to attract FDI, especially since, after a decade of steady and strong growth, FDI flows dropped sharply in 2001, in the wake of the world economic slowdown.These countries have used various policies and measures to attract and increase benefits from FDI, from targeted promotion policies to incentives and performance requirements, as well as measures to support the enterprise sector. Many of these measures, however, are subject to new international rules in the framework of multilateral agreements, such as the WTO Agreements on trade-related investment measures (TRIMs) and on subsidies and countervailing measures, or other regional or bilateral agreements.While some of these agreements are subject to further review, the challenge for policy makers is to deepen their understanding of what policies and policy tools are most important from a development perspective, how international rules in the area of investment would affect them, and what commitments can be sought from home countries and transnational corporations (TNCs) to support national development objectives. In particular, the concept of the right to regulate in order to protect public interest and development objectives in the context of international investment agreements needs to be further elaborated, as do the linkages between different international agreements and their effect on this right to regulate.