The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS

Angelos Dimopoulos: Shifting the Emphasis from Investment Protection to Liberalization and Development: The EU as a New Global Actor in the Field of Foreign Investment

 This article sketches the characteristics of the emerging EU foreign investment policy, as they appear in practice in the EC-CARIFORUM Economic and Partnership Agreement. Examining its provisions on foreign investment, the paper illustrates that the EPA departs from the traditional BITs and puts emphasis on the liberalization and development aspects of foreign investment regulation. Understanding this shift of policy the article argues that it founded not only on the limitations of EC competence, but also on the EC external relations goals to reconsider the objectives of foreign investment regulation to attract foreign investment and ensure benefits from it. Assessing whether the EPA provisions respond to the goals set, the article argues that despite providing an incomplete framework, the EPA addresses satisfactorily these goals, balancing the divergent interests of home, host states and foreign investors.

Angelos Dimopoulos is PhD candidate (European University Institute), LL M (Cantab), M L E ( Hannover ).

Lorenzo Cotula: Pushing the Boundaries vs Striking a Balance: The Scope and Interpretation of Stabilization Clauses in Light of the Duke v. Peru Award

 After many years since a published award last dealt with stabilization clauses, an arbitral tribunal recently found the government of Peru to have breached a tax stabilization commitment. The Duke v. Peru award comes at a time of renewed interest in stabilization clauses, not only as effective risk management tools but also as possible sources of concern for the ability of host states to take action in the public interest. The latter set of concerns has triggered a lively debate on whether stabilization clauses may make it more difficult for poorer countries to regulate in pursuit of human rights or sustainable development goals, if doing so may negatively affect ongoing investment projects. The scope and interpretation of stabilization commitments are at the heart of that debate. While the Duke v. Peru award does not directly deal with sustainable development issues, its reasoning provides useful insights on the application of stabilization clauses, and raises questions as to their possible implications for host state measures in pursuit of sustainable development.

Dr Lorenzo Cotula, Law Degree (University ‘ La Sapienza ’ of Rome), MSc (London School of Economics), PhD (University of Edinburgh), is Senior Researcher - Law and Sustainable Development at the International Institute for Environment and Development (IIED), in the UK.

Badar Alam Iqbal and Theo Van Der Merwe: World Trade Organization: What is its Future?

Since the formation of World Trade Organization (WTO) i.e. on January 1, 1995, the world trade body has failed to discharge its duties and responsibilities and hence, the extent of differences between the developed and developing countries on certain vital and strategic issues, sine-qua-non for the survival of global multilateral trading system, antidote of bilateralism has been on the rise. These differences have reached an optimum level after the Doha Development Agenda. Thereafter, the negotiations have failed to make any breakthrough in the global trade negotiations. These are very critical and dangerous trends that have emerged out. The continuous deadlock in negotiations, may lead the WTO in doldrums. The present paper analyses the emerging trends and issues in respect negotiations that have taken place under WTO regime that may lead to uncertainty

Badar Alam Iqbal is Visiting Professor at the Department of Economics of the University of South Africa in Pretoria ( South Africa ).

Theo Van Der Merwe is Chairman of the Department of Economics of the University of South Africa in Pretoria ( South Africa ).

Roberto Soprano: The Threat of Material Injury in Anti-Dumping Investigations: A Threat to Free Trade

 Antidumping measures have been criticised for hiding protectionist intents. Although the ADA disciplines and limits the adoption of antidumping measures, lacunae in the text allow the use of antidumping measures as protectionist devices. One of the possibilities created by the ADA is the imposition of antidumping measures on the basis of the mere threat of injury. This article will firstly analyse the concept of material injury and threat of injury within the ADA and in the light of the decisions of WTO dispute settlement organs. It will then focus on past and recent practice relating to the recourse to the threat of injury by WTO members. Finally, it will deal with the relationship between protectionism and financial crisis which underlines the need for amendments in the ADA in order to reduce arbitrariness in investigations.

Robert Soprano is a Ph.D Candidate in International Law at the University of Salerno and a Visiting Fellow at the Lauterpacht Centre for International Law, MILE (WTI), LL.M and BA ( Milan ).

Kálmán Kalotay: The Political Aspect of Foreign Direct Investment: The Case of the Hungarian Oil Firm MOL

 Based on the analysis of the case of the Hungarian oil and gas firm MOL, target of a hostile takeover bid by first by Austria’s OMV (2007), then by Russia’s Surgutneftegaz (2009), this essay attempt to show how such attempts in an industry (energy) deemed strategic by the host country contributes to the revival of political considerations related to foreign direct investment. It is argued that, although sensitivities to Russian investors may be limited to certain parts of the world with a difficult historical heritage, the case of Hungary is not isolated. Other countries can show other types of sensitivities, leading to a similar result. Hence politics in foreign direct investment needs to be a major theme for future research. It is also emphasized that politics is not equal to protectionism. Indeed, some political intervention into investment may be more, and not less, favourable to foreign investors.

Kálmán Kalotay is an Economic Affairs Officer at the United Nations Conference on Trade and Development in Geneva , Switzerland .

Sasidaran Gopalan and Ramkishen S. Rajan: Financial Sector De-Regulation in Emerging Asia : Focus on Foreign Bank Entry

Over the last decade many emerging Asian economies have been liberalizing their financial sectors, including opening up of their banking systems to foreign competition. This paper examines the extent of de jure and de facto policies in Asia with regard to the introduction of greater foreign competition. To preview the main conclusion, while there has clearly been greater international financial liberalization in the region, Asia lags behind emerging Europe and Latin America when it comes to the relative significance of foreign banks in their respective domestic economies. The paper goes on to discuss possible reasons behind Asia ’s relatively cautious approach towards this policy.

Sasidaran Gopalan is a Research Associate at the Institute of South Asian Studies , an autonomous research institute at the National University of Singapore.

Ramkishen S. Rajan is an Associate Professor at George Mason University in Fairfax Virginia and a Visiting Senior Research Fellow at the Institute of South Asian Studies and Institute of Southeast Asian Studies in Singapore .

Abdullah Suleiman Nawafleh: The Legal Framework for Foreign Direct Investment in the Hashemite Kingdom of Jordan

Among the Middle Eastern countries, Jordan has been particularly active in attracting foreign direct investment (FDI). In this respect it has constantly strived to maintain the competitiveness of FDI determinants, including the legal environment. Various policy instruments and institutions have been deployed. Despite the challenges that face the region, the Government of Jordan has enhanced the utility of the existing determinants and is constantly considering new strategies to attract FDI. Accordingly, the FDI legal framework has also been improved. This paper examines the legal aspects of FDI in Jordan on a broad basis and within the context of the emerging legislative policy trends.

Dr. Abdullah Suleiman Nawafleh, LLB in Law, Amman University (Amman-Jordan); LLM in International Law and Diplomacy, University of Derby (Derby-England); and PhD in Law, University of Westminster (London-England).

Jacques Werner: Arbitral Chronicle V—David Ricardo and Adam Smith

 Jacques Werner is an International Commercial Arbitrator in Geneva , Switzerland and the Chairman of the Geneva Global Arbitration Forum.