The Journal of

WORLD INVESTMENT

ABSTRACTS 

Mitsuo Matsushita: Basic Principles of the Wto and the Role of Competition Policy

As trade liberalization progresses through Gatt/Wto negotiations, it becomes increasingly important to deal with private trade restrictions, such as international cartels and abuse of dominant positions by powerful multinational corporations. This article examines the congruence of the objectives of the Wto and those of competition policy, reviews Wto dispute cases which have some bearing on this issue and summarizes various reports addressing the role to be played by competition policy within the Wto. Although there is consensus among Wto Members that such private anti-competitive practices as international cartels are harmful to the sound development of international trade, there is divergent views as to what type of international agreement on competition policy—if any—should be introduced into the Organization. The article therefore offers four options and recommends a non-binding multilateral framework as the most realistic for the present.

Mitsuo Matsushita is Professor of Law at Seikei University, Tokyo, Japan, and a former member of the Wto Appellate Body.

Ruosi Zhang: Impacts of Trade Liberalization on China's Environmental Protection and Poverty Alleviation Policies

Poverty and environmental problems are closely linked, and China is no exception. It is possible to reduce poverty in combination with environmental improvement but, to achieve this goal, a sound supporting domestic policy is necessary. In the context of globalization, however, the effectiveness of any such domestic policy is linked to international trade. China's grain-for-ecology swap policy has made a good beginning at reducing poverty through environmental protection. It shows that trade liberalization may make positive contributions in this effort by increasing the efficiency of resources allocation. However, it is also clear that trade liberalization in and of itself cannot guarantee this result and, as a result, the world trading system should better reflect poverty-and-environment concerns.

Ruosi Zhang, LL.D., is a Senior Research Fellow at the Institute of Law of the Chinese Academy of Social Sciences, Beijing, China.

Peter Nunnenkamp: Fdi and Economic Growth in Developing Countries

In contrast to widely-held belief, the positive effects of foreign direct investment (Fdi) inflows on economic growth in developing and newly industrializing economies cannot be taken for granted. To improve our understanding of Fdi's impact on growth, it must be recognized that Fdi is not a homogenous phenomenon. The empirical analysis presented in this article shows that it depends on time-varying and location-specific factors whether Fdi and growth are positively correlated and which leads or lags the other. The good news for developing countries is that early opening-up to Fdi inflows, combined with close integration into the world trade, strengthens the Fdi–growth nexus. Small and less advanced economies can benefit from positive effects of Fdi as much as the larger and more advanced developing countries. The Fdi–growth nexus also appears to be strengthened by the current trend towards globalized production patterns.

Peter Nunnenkamp is Research Director of the Institute of World Economics, Kiel, Germany. He is the author of European Fdi Strategies in Mercosur Countries, which appeared in The Journal of World Investment, Vol. 2, No. 3, September 2001.  

Jan Schokkaert: European Conventional Practice of Protection of Investments Abroad

This article examines the ways in which some European countries—the Belgo-Luxemburg Economic Union (Bleu), in particular—have provided for protection of investors and investments in bilateral investment treaties (Bits). Beginning with definitions of investments and investors, the article moves on to a brief overview of the development of the concept of international investment. It then presents a thorough coverage of how Bits provide for protection of foreign investments, how they address the problem of nationalization or expropriation, and the various mechanisms they provide for the resolution of investment disputes. A particular focus of the article is how the language of Bits can be improved, and the Bleu Model Investment Protection Agreement is published for the first time as an Annex to the article (in an English-language version).

Jan Schokkaert, Dr. Jur., is an advisor general honoris causa at the Belgian Ministry for Foreign Affairs (Consular Affairs). He has wide experience in consular affairs, legal protection of investments and international indemnification matters.

Patrick Dumberry: The Quest to Define "Fair and Equitable Treatment" for Investors under International Law—The Case of the Nafta Chapter 11 Pope & Talbot Awards

This article critically analyses the latest Awards in the Nafta Chapter 11 Pope & Talbot case. The Final Award in Respect of Damages, issued on 31 May 2002, contains very interesting developments in the proper interpretation to be given to the concept of "fair and equitable treatment" included in the "minimum standard of treatment" clause of Nafta Article 1105. Is "fair and equitable treatment" a concept which should be applied in addition to the minimum standard of treatment of investors under international law? Is there a threshold limitation whereby governmental conduct complained against by foreign investors must be "egregious" or "outrageous" in order to breach this minimum standard? The Award also tackles the question of the validity and effect of the Nafta Commission's "Interpretation" of Article 1105, issued on 31 June 2001, as well as the interaction of this Interpretation with the "most-favoured-nation" clause contained in Nafta Article 1103.

Patrick Dumberry is a member of the Quebec, Canada, Bar, an attorney at Lalive & Partners, Geneva, Switzerland, and a doctorate candidate at the Graduate Institute of International Studies in Geneva. He is also the author of The Nafta Dispute Settlement Mechanism—A Review of the Latest Case-Law, which appeared in The Journal of World Investment, Vol. 2, No. 1, March 2001.

Document: In the Matter of an Arbitration under Chapter Eleven of the North American Free Trade Agreement Between Pope & Talbot Inc. and Government of Canada Award in Respect of Damages by Arbitral Tribunal, 31 May 2001.

The full text of this document is presented.

Fred O. Boadu and Tara Skrabanek: The Textile Rules under the African Growth and Opportunity Act—Opportunities and Challenges

This article examines the textiles and apparel rules under the African Growth and Opportunity Act (Agoa), offering an overview of the Agoa's legislative history and a summary of preferential treatment requests submitted by textiles importers and exporters. At this early stage, it is difficult to assess the impact of the Agoa on the United States–Sub-Saharan Africa textiles trade. However, the processing of requests for preferential treatment under the "short supply" rules is a continuing source of uncertainty and transaction costs for countries and firms of Sub-Saharan Africa. Nonetheless, there are indications that the Agoa can serve to strengthen intra- and inter-regional trade if beneficiary countries provide an enabling domestic environment for foreign investment.

Fred O. Boadu is Associate Professor in the Department of Agricultural Economics of Texas A&M University, College Station, Texas.

Tara Skrabanek is a Research Assistant in the Department of Agricultural Economics of Texas A&M University, College Station, Texas.