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Investment provisions in preferential trade agreements: Evolution and current trends

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  • Crawford, Jo-Ann
  • Kotschwar, Barbara

Abstract

Our analysis covers 230 PTAs of which 111 contain substantive provisions on investment. Over the past 60 years or so, States have created an extensive network of Bilateral Investment Treaties (BITs) that govern and protect international investment. The number of BITs concluded annually continues to increase, although this rate has tapered off over the past decade. The rise in the number of BITs has been accompanied by an increasing trend among States to include investment provisions in preferential trade agreements (PTAs). In order to capture this trend we constructed a matrix of 57 investment provisions located in the investment chapter. The analysis covers provisions on scope and definition of the investment framework, investment liberalization and protection, social and regulatory goals, institutional framework, and dispute settlement. We find that the scope and depth of investment provisions has increased over time though at a modest rate. Regional groupings of PTAs demonstrate a number of common characteristics particularly with regard to the scope and definitions of the investment framework and the provisions relating to investment liberalization and protection. Host-state flexibilities are ensured in a majority of PTAs through the inclusion of a broad "right to regulate" provision. Provisions aimed at the protection of the environment occur in more than three quarters of PTAs.

Suggested Citation

  • Crawford, Jo-Ann & Kotschwar, Barbara, 2018. "Investment provisions in preferential trade agreements: Evolution and current trends," WTO Staff Working Papers ERSD-2018-14, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd201814
    DOI: 10.30875/ecc9b298-en
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    References listed on IDEAS

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    1. Katia Yannaca-Small, 2006. "Interpretation of the Umbrella Clause in Investment Agreements," OECD Working Papers on International Investment 2006/3, OECD Publishing.
    2. David Gaukrodger, 2017. "The balance between investor protection and the right to regulate in investment treaties: A scoping paper," OECD Working Papers on International Investment 2017/2, OECD Publishing.
    3. Chornyi, Vasyl & Nerushay, Marianna & Crawford, Jo-Ann, 2016. "A survey of investment provisions in regional trade agreements," WTO Staff Working Papers ERSD-2016-07, World Trade Organization (WTO), Economic Research and Statistics Division.
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    Cited by:

    1. Alexander Jaax & Sébastien Miroudot, 2021. "Capturing value in GVCs through intangible assets: The role of the trade–investment–intellectual property nexus," Journal of International Business Policy, Palgrave Macmillan, vol. 4(3), pages 433-452, September.
    2. Ka Zeng & Yue Lu & Ya‐wei Li, 2021. "Trade agreements and Global Value Chain (GVC) participation: Evidence from Chinese industries," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 533-582, November.

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    More about this item

    Keywords

    Regional Trade Agreements; investment;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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