National FDI Policy Competition and the Changing International Investment Regime

This contribution to a Festschrift for Dr. SKB Asante, the leading in-house expert on matters related to investment policy-making at the United Nations Centre on Transnational Corporations, discusses a number of issues related to investment policy-making at the national and international levels these. At the national level, the focus is on policies aimed at competing for, and benefitting more from, foreign direct investment (FDI), as well as policies supporting outward FDI. At the international level, the focus is on the rise of bilateral investment treaties and the changing perspectives of developed and developing countries on the international investment regime. It discusses not only where we stand today in these areas, but it identifies also some of the challenges we face. These challenges arise from the growth of FDI, which is the culmination of the emergence of an integrated international production system established by multinational enterprises through a myriad of equity and non-equity relationships and the evolution of national and international investment policies. The growth of FDI, an integrated international production system, and the global value chains associated with it was possible because of an enabling policy framework, both at the national and international levels. The hallmarks of this framework are that countries not only allow FDI to take place, but actively seek to attract and protect it through international investment agreements, especially bilateral investment treaties.