LEADING ECONOMISTS, ACADEMICS, AND ATTORNEYS COME TOGETHER TO FIND COMMON GROUND; POLICY SOLUTIONS
WASHINGTON, April 8, 2014 /PRNewswire/ — On April 8, the Embassy of Ecuador and Vale Columbia Center on Sustainable International Investment convened a forum titled “Development, FDI and Investment Treaties” at the Cultural Center of the Inter-American Development Bank in Washington, DC. The forum brought together leading economists, attorneys, and academics in an open discussion to find policy solutions on foreign investment and the international frameworks that govern it.
“We firmly believe that foreign direct investment (FDI) has the potential to contribute significantly to sustainable economic development but we must have trade policies that work in a 21st century world,” said Ecuadorian Ambassador to the United States Nathalie Cely. “Today’s conference brought together stakeholders from around the world to help establish a global set of firm standards and regulations that meet the needs of not just the industrialized world, but also developing economies. The government of Ecuador fully supports the principle that all investment risk should be rewarded, but we must balance corporate interests with public interests. Our experience in Ecuador shows that profitable and responsible investments are not mutually exclusive.”
Among participants in the conference were leading economics professor Ha-Joon Chang of University of Cambridge; Richard Kozul-Wright, director of the Unit on Economic Cooperation at the United Nations Conference on Trade and Development; Julian Arato, a fellow at the Vale Columbia Center on Sustainable Development at Columbia University; legal expert José Daniel Amado; and law professor Gus van Harten of York University and previously the London School of Economics. The panelists discussed the role of FDI in the sustainable economic diversification of developing countries and the roles of investment treaties in shaping international investment.
In her remarks, Ambassador Cely argued that reform should address the legitimacy, consistency, and predictability of the system by instituting: 1) a transparent selection of arbitrators who only exercise this role and do not defend companies in other venues, which can result in obvious conflicts of interest, 2) the establishment of an appellate body within the arbitration system, 3) the incorporation in investment treaties investors’ obligation to file claims only after local legal avenues have been exhausted, and 4) the incorporation of the right of States to exercise their regulatory capacity on issues related to health, environment and industrial policy, among others.
“It is entirely possible to reverse these rules,” Professor Chang said. “They are entirely man-made. The only reason that these rules exist is because powerful countries wrote them that way, not because they are some inevitable consequence of economic development.”
“Through creative treaty-shopping, multinational corporations can today attach robust property-style protections for their contracts with foreign sovereigns,” said Fellow Arato. “I thus argue that corporations must today be understood as international lawmakers whose agreements with states yield major consequences for domestic public law.”
“What makes foreign direct investment treaties unique is that unlike other international treaties, when it comes to systems of arbitration, there’s no requirement to exhaust reasonably available local remedies,” Professor van Harten said.
To see the full list of presenters and read the presentations from today’s conference, please see: http://www.ecuador.org/blog/?p=3596.