This is from U.S. Trade Representative Michael Froman:
investment protections are ... intended to safeguard against a host of abuses, including discrimination, repudiation of contracts, and expropriation of property without due process of law ...
It surprises me how little analysis of this issue exists. From what I can tell, the investment regime seems to be based on assumptions of bad treatment of foreign investment carried over from the 1950s, 1960s and 1970s. But what does the treatment of foreign investors look like today?
Froman mentions a "host of abuses," and then lists three: (1) discrimination, (2) repudiation of contracts, and (3) expropriation of property without due process of law. Are there other abuses? What are they?
And what exactly is the situation with these three abuses? In what countries do they take place? How often do they take place?
And how does the situation of foreign investors compare to that of domestic investors, or for that matter with that of ordinary citizens (i.e., non-investors)? Who exactly needs protection from governmental abuse?
I'm not sure we understand the nature of the problem, assuming there is one, very well. With tariffs or discriminatory public procurement, you can often see the problem clearly. With investment issues, by contrast, problems are difficult to detect. A good first step, it seems to me, might be to have a neutral organization -- the OECD? UNCTAD? the WTO? -- gather some data on how foreign investors are treated around the world. If we knew what the problem was, we would be better equipped to address it.
