22 BILATERAL INVESTMENT TREATIES SIGNED AT SAPPORO (JAPAN)

During a round of intensive negotiations organized and facilitated by the secretariat of the United Nations Conference on Trade and Development (UNCTAD) over the past two weeks, 12 countries initialed 22 bilateral investment treaties (BITs), paving the way for increased FDI flows, particularly between developing countries. The following countries initialed treaties which are now ready for signature: Cambodia with Croatia, Egypt, Lao People´s Democratic Republic, Myanmar and the Philippines; Colombia with Egypt; Croatia with India, Lao People´s Democratic Republic and Peru; Egypt with Lao People´s Democratic Republic, Peru and the Philippines; Ghana with India, Indonesia and the Philippines; India with Lao People´s Democratic Republic and Peru; Indonesia with Peru and the Philippines; Lao People´s Democratic Republic with Myanmar and the Philippines; and Peru with the Philippines.

Agreements have been negotiated and agreed minutes have been signed ad referendum among the following countries: Colombia with Croatia, India, Indonesia and the Philippines; Croatia with the Philippines and Indonesia; India with Myanmar; and Indonesia with Iran.

Countries are increasingly concluding bilateral investment treaties in order to promote and protect foreign investments and to foster economic cooperation with other countries. By signing BITs, developing countries in particular are sending a strong signal to the business community worldwide, as well as to their own investors, of their commitment to providing a predictable and stable legal framework aimed at encouraging both inward and outward investment with a view to increasing FDI flows.

The total number of bilateral investment treaties at the end of 1999 was 1,855 -- 130 more than the previous year (see figure I)-- involving 174 countries. Of these BITs, 498 were concluded among developing countries (see figure II). Indeed, the increased participation of these countries in such treaties has not been limited to partners in the developed world. Since the 1980s, developing countries have been signing more and more such treaties with other developing countries. More than 10 BITs have already resulted from the recent rounds of negotiations organized under the auspices of UNCTAD.

Supporting the negotiation of BITs is a part of UNCTAD´s work on increasing South-South investment cooperation. UNCTAD´s role at Sapporo was to facilitate the negotiations through the provision of expert advice, conference facilities, secretarial backstopping and travel funds. The organization did not participate in the negotiations themselves.

The Sapporo negotiations follow earlier rounds of negotiations of BITs and double taxation treaties organized by UNCTAD as part of its work programme on international investment agreements, which includes capacity-building seminars, regional symposia, training courses, dialogues between negotiators and groups from civil society, and the preparation of issues papers. The negotiations belong to a long tradition at UNCTAD of providing active support to efforts by developing countries to attract and benefit from investment.

Negotiators say that one advantage of bringing them together in a single location to work out BITs is that it keeps the momentum going and provides them with an opportunity to exchange experiences. In two weeks, they were able to achieve an outcome that would otherwise have required numerous contacts and sometimes as much as three or four years or more to achieve. "In our two weeks here we managed to finalize five agreements", said Governor J. Antonio C. Leviste, head of the delegation of the Philippines, "which is far more than we could otherwise have done in two years". "The atmosphere was very constructive and allowed for amicable discussions and the conclusion of agreements with countries we would not have had a chance to meet otherwise", added Ms. Mikica Munjin-Wertag, head of the Croatian delegation.

The Sapporo round has been supported by the Government of Japan through funding from the United Nations Development Programme. The negotiations will formally be brought to a close at an initialling ceremony here tomorrow, presided over by Mr. Karl P. Sauvant, Officer-in-Charge of UNCTAD´s Division on Investment, Technology and Enterprise Development, in the presence of Mr. Kazuo Tanaka, Senior Assistant of the Developing Economies Division, Economic Affairs Bureau, Japanese Ministry of Foreign Affairs.