Balancing Developed and Developing State Interests under a Regulatory Framework for Foreign Direct Investment: The Potential of the GATS Model

Abstract

This thesis examines the need for a multilateral regime for the regulation of foreign direct investment. The absence of such a regime has slowed the growth of foreign direct investment, as investment decisions are difficult to make because of the uncertainty of investment rules. Attempts to establish a multilateral framework for investment have failed due to disagreement between developed and developing countries on its scope. The major source of controversy has been the inclusion of the national treatment standard in the prospective agreement. This thesis analyses the position of both sides, and attempts to find a balance between the positive and negative effects of the multilateral framework for regulating foreign direct investment. It argues that an investment regime modelled after the General Agreement on Trade in Services could be beneficial, as it would provide security for investment, and flexibility for host countries to control the inflow of foreign investment.