International law and the evolving legal regime of foreign direct investment, a developing country's perspective

by Wang, Feng

The past decade witnessed an increasingly rapid escalation towards globalization in the world economy. In spite of the tremendous growth of FDI flows and the ambitious expansion of MNEs, no single comprehensive set of multilateral rules has been reached goveming the issue of FDI. Developing countries have generally resisted the adoption of a multilateral treaty protecting and encouraging FDI, while industrialized nations, on the other hand, have felt a great need for such an agreement, seeking to establish high standards of liberalization for global investment rnovements. An international legal framework for FDI has begun to emerge in recent times, which is actually in response to the current uncertainty of the customary international law. It inctudes, inter dia, national statutory regimes, and international rules and principles established at bilateral, regional and multilateral level. The BITS have played an important role in this process, and the rapid proliferation of these treaties signifies their importance as the potential foundation upon which a future multilateral agreement can be built. Two recent developments have M e r brought the issue to the fore of the international cornrnunity: first, the embodiment of a set of investment-related rules in the multilateral trading system, and second, the initiative of the OECD to promote an MAI. While the TRIMs Agreement was rather conservative in the scope, applying merely to investment mesures that have distorting effects on trade in goods, the negotiations on the MAI appeared to be far more ambitious. However, the fundamental premise upon which the MAI has been built is considerably flawed and one-sided, which has indeed resulted in its abortion. From the perspective of developing countries, the most significant issue at point is precisely how a multilateral framework can be fonnulated in such a flexible manner that they could remain suficient margin of autonomy to benefit from the inward FDI. and thereby pursue their own economic development objectives. 1 wish to express my sincerest thanks and appreciation to my supervisor, Professor K.V. Raman, for his continuous guidance and invaluable support throughout the research and writing of this thesis. His insightfd and stimulating comrnents helped foster the ideas that 1 developed in this thesis. I also thank him for his attentive reading of every earlier drafl of my thesis. 1will always cherish his teaching. 1 say thank you to Phyllis Reid for her wannth and timely assistance whenever 1 need it. To other Faculty members, particularly to Professor Sheila McIntyre, Professor George Alexandrowicz, and Professor Phillip Goldman, 1 wish to express my gratitude for their instruction and support in various aspects. I would like to thank the School of Graduate Studies and the Faculty of Law at Queen's University for providing me this opportunity to pursue my graduate study and their generous financial support without which this study would have been impossible. My speciai thanks also go to the saof the law library, particularly Mai Chen, for helping me with al1 the necessary researches. I am also grateful to Victor, Emily, Carol, Anne, Tian, Bojana, my fellow graduate students, whose fnendship made my stay in Kingston a cheerfbl and unforgettable experience. I thank also many of my friends and former colleagues in China, who helped me to collect important Chinese research sources. I must acknowledge the warrnest support and love of my parents whose sacrifice has got me where 1 am today. Notwithstanding comments and suggestions of the individuals above, 1 am solely responsible for any errors, omissions or imperfections of this work. MEC ACP BITS ECOSOC EU FCNs FDI FIRA GATS GATT ICJ ICSID IDA IFC ILM IL0 IMF ITO MAI M m MIF MIGA MNEs NAFTA NGOs NIE0 OECD R & D SEZs TNCs TRIMs TRIPS UN