WORLD TRADE
ORGANIZATIONWT/WGTI/W/163
11 June 2003
(03-3025)
Working Group on the Relationship
between Trade and InvestmentOriginal:  English
COMMUNICATION FROM THE EUROPEAN COMMUNITY
AND ITS MEMBER STATES
The following communication, dated 6 June 2003, has been received from the Permanent
Delegation of the European Commission.
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OVERVIEW OF TECHNICAL ASSISTANCE AND
CAPACITY BUILDING ACTIVITIES RELATED TO FDI
I. INTRODUCTION
1. The European Union recognises the case for a multilateral framework in order to secure
transparent, stable and predictable conditions for long-term cross-border investment, particularly
foreign direct investment. We also recognise the need for enhanced technical assistance and capacity
building in this area. This paper aims to give a broad overview of the current and planned technical
assistance and capacity building activities related to FDI, that the EU1 is funding in developing
countries.
II. BACKGROUND
2. The main aim of an investment for development framework would be to encourage and facilitate
world-wide FDI flows, particularly to and from developing countries, and to contribute to the
expansion of a more balanced pattern of trade flows. Trade and FDI go hand in hand. Two thirds of
international trade flows are generated by FDI, a nd most FDI deterrents also have a negative impact
on the export capacity of the countries in which they occur.
3. According to the economic literatu re, FDI flows and the capacity of host countries to fully benefit
from FDI, depend on several factors such as: political and macroeconomic stability, level of
infrastructure, size of markets, stable and transparent legal and policy frameworks, business
environment, education and skills, and effectiveness of institutions. A multilateral framework would
be crucial in improving the level of transparency as well as in increasing the predictability and
security of the rules that apply in each Member country.2 Thus, at least one of the determinants of
                                                     
1 The annexes only include figures on the EC Programmes and do not include TA/CB activities carried
out individually by each Member State.
2 Transparency and non-discrimination are widely acknowledged as important principles for FDI. Most
governments have incorporated the 2 principles in their domestic laws and regulations. Moreover, manycountries seem to recognise the case for international rules on investment, as shown by the 2,100+ existing
Bilateral Investment Treaties (BITS) which usually include basic principles of non-discrimination andWT/WGTI/W/163
Page 2
FDI, namely stability and transparency of legal and policy frameworks, could be greatly enhanced by
closer multilateral co-operation.3
4. At the same time we are aware that, in order to significantly foster investments in developing
countries, particularly in those that have been ma rginalized by FDI so far, it is also important to
improve the determinants of FDI through other mean s. Most of the efforts need to be done primarily
by each host country. Developed countries have an important role to play in supporting the efforts
carried out by developing countries.
5. The European Union and its Member States, taken together, is the biggest donor of development
aid in the world. An important share of this assistance is directed to projects which, directly or
indirectly, help developing countries to attract more FDI and to benefit from it. This might be done,
for instance, by channelling funds towards private sector support, or towards investment promotion
programmes such as the Asia-Invest Programme. Apart from this, other projects aim at improvingimportant components of the enabling environment of FDI such as infrastructure, macroeconomic
stability, legal frameworks, regional co-operation to extend the market size or human resource
development.
6. The tables in the annex summarise the funds allocated through EC programmes to technical
assistance and capacity building in the areas of infrastructure, macroeconomic stability, legal andpolicy frameworks, private sector support, human resources and institution building
4. We have put
together the beneficiaries in six regions or group of countries: ACP countries, Asia, West Balkans,
Latin America, Southern Mediterranean / Middle East and Eastern Europe / Central Asia. The tables
indicate the funds allocated for ongoing and programmed projects. All programmes and projects
respond to specific demands from the beneficiary countries and are agreed with them since theprogramming stage.
7. The tables show, for instance for the ACP group, that the funding for TA/CB activities between
1996 and today, €3.5 billion, represents around 11% of th e total FDI flows from the EU to ACP in the
same period. In other geographic areas such as Latin America, where the TA/CB needs are different
and FDI inflows have been grow ing significantly, the funding has been €675 million between 1991
and today, representing less than 0.5% of EU  FDI flows to the region between 1996 and 2001. The
CIS countries received €164 million and the West Balkans €443 million between 2000 and 2002, the
                                                                                                                                                                    
investment protection. European investors (see survey presented in the WGTI in 2000) have identified several
problems that affect their FDI in developing countries, such as transparency and predictability of rules, that
could be improved by international rules.
3 It has been noted that a multilateral framework would : 1) provide greater credibility to the policies of
host countries, and reduce the risk associated with FDI;  2) reduce transaction costs that exist today due to the
variety of existing FDI rules; 3) ensure enforcement of FDI rules through the WTO DS mechanism; 4) providean incentive for countries to improve their FDI environment, rather than remaining hostage to domestic vested
interests. See, among others, Sanna-Randaccio, Why we need a MAID (a MAI for Development), Workshop
paper, EIBA 26
th Annual Conference; Balasubramanyam, The Case for Extending the WTO System to Foreign
Direct Investment , Cordell Hull Institute Trade Policy Roundtable, 2001; Drabek, A Multilateral Agreement on
Investment: Convincing the Sceptics , The Hague, 1998; Graham, Fighting the Wrong Enemy: Antiglobal
Activists and Multinational Enterprises , Institute for International Economics, 2000; Moran, Foreign Direct
Investment and Development , Institute for International Economics, 1998; Muchlinski, Towards Multilateral
Investment Rules? Key Issues in the Post-Doha Agenda , paper based on research for UNCTAD Series of Papers
on Issues in International Investment Agreements, 2003.
4 This exercise is different from the Doha TA Database. In the Doha Database, the European Union co-
operation projects are classified accordi ng to the specific trade topic that they target. This exercise takes a
broader approach and includes all projects relevant to th e determinants of FDI. These factors, like e.g. private
sector support, might also be important to other topics such as competition.WT/WGTI/W/163
Page 3
MEDA countries were allocated €1.7 billion and Asia €593 million between  1995 and today.
Moreover, significant amounts for all these areas have been programmed for the 2002-2007 period.
III. CONCLUSION
8. In parallel with the trade related TA activitie s carried out in the context of the Doha work
programme, the European Union is fully committed to continue to assist DCs in order to improve theconditions that determine their long-term capacity to  attract and to benefit from FDI in a sustained
manner. Within the EC, all the services involved in development assistance programmes work in
close co-operation with the recipient countries with the aim of maximising the positive impact and
sustainability of each project in the host country.  We will also continue to improve the coherence of
our TA/CB activities with our policies aimed at improving trade and investment conditions world-
wide, in line with the objectives of the Doha Development Agenda.WT/WGTI/W/163
Page 4
EXPLANATIONS TO THE TABLES
Countries of the indicated regions:
ACP:
Angola, Benin, Botswana, Burkina Faso, Burundi, Ca meroon, Cape Verde, Central African Republic,
Chad, Comoros, Congo (Brazzaville), Congo (Kinshasa), Côte d’Ivoire, Djibouti, Equatorial Guinea,
Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guin ea, Guinea Bissau, Kenya, Lesotho, Liberia,
Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda,
Sao Tome & Principe, Sierra Leone, Senegal, Seychelles, Somalia, South Africa, Sudan, Swaziland,
Tanzania, Togo, Uganda, Zambia, Zimbabwe, Antigua, Bahamas, Barbados, Belize, Cuba, Dominica,Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St.-Kitts & Nevis, St –Lucia, St.-Vincent,
Suriname, Trinidad & Tobago, Cook Islands, Federated State of Micronesia, Fiji, Kiribati, Marshall
Islands, Nauru, Niue, Palau, Papua New Guinea, Sa moa, Solomon Islands, Tonga, Tuvalu, Vanuatu
Asia:
Afghanistan, Bangladesh, Bhutan, Cambodia, China,  India, Indonesia, Lao, Malaysia, North Korea,
Philippines, Sri Lanka, Thailand and Vietnam
CARDS
Albania, Bosnia Herzegovina, Croatia, Federation Serbia and Montenegro, Former Yugoslav
Republic of Macedonia, Kosovo
Latin America:
Argentina, Brazil, Bolivia, Costa Rica, Colombia, Chile, Ecuador, El Salvador, Guatemala, Honduras,
Mexico, Nicaragua, Panama, Peru, Paraguay, Uruguay, Venezuela
MEDA:
Algeria, Egypt, Jordan, Lebanon, Morocco, Israel, Sy ria, Tunisia, Turkey, West Bank and Gaza Strip
and Yemen
TACIS:
Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russian
Federation, Tajikistan, Turkmenistan, Ukraine and Uzbekistan
Area of Activity:
1. INFRASTRUCTRE
14010  Water resources policy and administrative management
Water sector policy, planning and programmes; water legislation and management; institution
capacity building and advice; water supply assessments and studies; groundwater, water quality andwatershed studies; hydrogeology; excludin g agricultural water resources (31140).
210xx Transport220xx Communications23010 Energy policy and administrative management
Energy sector policy, planning and programmes; aid to energy ministries; institution capacity building
and advice; unspecified energy activities including energy conservation.WT/WGTI/W/163
Page 5
2. MACROECONOMIC STABILITY (Objective; low inflation, stable exchange rates etc.)
15010  Economic and development policy / Planning
(Macro-economic, fiscal and monetary policy and planning; social planning; economic and social
analysis and forecasting; structural reforms; development planning; organisational development;support to ministries involved in aid co-ordination; other ministries and government departments
when sector cannot be specified.)
31193  Agricultural financial services
Financial intermediaries for the agricultural sector including credit schemes; crop insurance.
510xx Structural adjustment assistance with World Bank /IMF
3. LEGAL and POLICY FRAMEWORKS (including business regulation, rule of law,
effective justice system etc.)
15030 Legal and judicial development
Constitutional development, legal drafting; institutional strengthening of legal and judicial systems;
legal training and education; legal advice and services; crime prevention.
16110  Employment policy and administrative management
institution capacity building and advice.The following has been left out: Employment policy and planning; labour law; labour unions; support
programmes for unemployed; employment creation and income generation programmes; occupational
safety and health; combating child labour.
31110  Agricultural policy and administrative management
Agricultural sector policy, planning and programm es; aid to agricultural ministries;  institution
capacity building and advice.
The following has been left out: unspecified agriculture
31310 Fishing policy and administrative management
Fishing sector policy, planning and programmes; institution capacity building and advice.
The following has been left out: ocean and coastal fishing; marine and freshwater fish surveys andprospecting; fishing boats/equipment; unspecified fishing activities
32210 Mineral/mining policy and administrative management
Mineral and mining sector policy, planning and pr ogrammes;  mining legislation information systems,
institution capacity building and advice.The following has been left out: mining cadastre, mineral resources inventory ; unspecified mineral
resources exploitation
33110 Trade policy and administrative management
Trade policy and planning; domestic marketing, trade, service industries, patents and trademarks.Remark: Aid aiming at integrating the developing country in the world economy, including
implementing trade liberalisation and WTO commitments, WTO accession and implementation
issues, clearer laws and regulations affecting investors  are shown under sub-group 3.
41010 Environmental policy and administrative management
Environmental policy, laws, regulations and economic instruments; administrational institutions and
practices; decision-making procedures; seminars, meetings.
The following has been left out: environmental and land use planning; miscellaneous conservation
and protection measures not specified belowWT/WGTI/W/163
Page 6
4. PRIVATE SECTOR SUPPORT  (Including support to SMEs etc.)
250xx Business and other services
321xx Industry
5. HUMAN RESOURCE DEVELOPMENT and INSTITUTIONAL BUILDING
(including labour skills, training of governmental officials etc)
11430  Advanced technical and managerial training
The following has been left out: Professional-level vocational training programmes and in-service
training.
15020 Public sector financial management
Strengthening financial and managerial accountability; public expenditure management; improving
financial management systems; tax assessment procedures; budget drafting; field auditing; measures
against waste, fraud and corruption.
15040 Government administration
Systems of government including parliament, local government, decentralisation; civil service and
civil service reform.
15050 Strengthening civil society
Community participation and development; co-operatives; grassroots organisations; development of
other participatory planning and decisi on making procedures and institutions.
16320 General government services
General services by government (or commissioned by government) e.g. police, fire protection;
customs; legal metrology, including administrative buildings.
The following has been left out: cartography, meteorology ; aerial surveys and remote sensing
16362 Statistical capacity building
Both in national statistical offices and any other government ministries.
16381 Research/scientific institutions
When sector cannot be identified.
240xx Banking and Financial Services
Custom reform  (modernisation and simplification of border controls,) is an important part of trade
facilitation and these activities are shown under sub-group 5.
Activities aiming at reducing technical barriers to trade (standardisation, TBT, SPS etc) have not been
included in this exercise. University exchange programmes,  restructuring of universities, and generalimprovements of education systems  are not included either. Only advanced technical and managerial
training have been taken into consideration and are mainly presented under sub-group 5 (some of the
activities may however fall under private sector support).
Activities aiming at political stabilisation and its related support to civil society have also been left
out.WT/WGTI/W/163
Page 7
DEFINITION OF THE ONGOING AND PROGRAMMING PROJECTS
Definition of an ongoing project
Ongoing projects may range from those actually in progress, to those where funds have been
committed (projects in preparation) but not yet sp ent. In very few projects in the region Latin
America, some projects might already be closed.
The duration of projects can overlap two programming periods (when projects have a longer term than
the programming period). The projects financed on budget lines are subject to the yearly
accountability of the Commission.
The year indicated for the ongoing period is the date when the first ongoing project started. However,
most of the ongoing projects started later, usually in 2001 for the ACP countries, in 2000 for Asia andCards, in the period from 1995-1998 for Latin America, in 1999 for Meda and in 2000 for Tacis.
Definition of a programming project
Programmed assistance is allocated to a given sector of activity, but the modalities for its commitment
may not yet have been finalised. For the duration of project implementation,  periods vary.WT/WGTI/W/163
Page 8Annex
EC Technical Assistance and Capacity Building Programmes related to FDI
Region:  African and Caribbean and Pacific Countries (ACP)
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 1998 1,494,034,873.38 2000-2007 2,370,730,000.00
2. Macroeconomic Stability 2001 822,295,734.90 2000-2007 1,300,550,000.00
3. Legal and Policy Frameworks 1996 409,601,884.00 2000-2007 895,250,000.00
4. Private Sector Support 2001 357,590,631.00 2000-2007 46,350,000.00
5. Human Resource Developmentand Institutional Building1998 389,909,023.30 2000-2007 9,700,000.00
Total ACP Total Amount ACP Total ACP
Ongoing Projects: 3,473,432,146.58 Programming: 4,622,580,000.00
EU FDI 1996-2001 31,893,000,000.00
ACP: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo (Braz zaville), Congo (Kinshasa), Côte d’Ivoire, Djibouti,
Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi,  Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger,
Nigeria, Rwanda, Sao Tome & Principe, Sierra Leone, Senegal, Seychelles, Somalia, South Africa, Sudan, Swaziland, Tanzania, Tog o, Uganda, Zambia, Zimbabwe, Antigua, Bahamas, Barbados,
Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St.-Kitts & Nevis, St –Lucia, St.-Vincent, Surinam e, Trinidad & Tobago, Cook Islands, Federated State of
Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Palau,  Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanu atu.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.WT/WGTI/W/163
Page 9EC Technical Assistance and Capacity Building Programmes related to FDI (cont'd)
Region:  ASIA
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 1999 137,500,000.00 2002/3 – 2004/5 136,300,000.00
2. Macroeconomic Stability - 0.00 2002/3 – 2004/5 0.00
3. Legal and Policy Frameworks 1995 144,500,000.00 2002/3 – 2004/5 248,100,000.00
4. Private Sector Support 1996 139,600,000.00 2002/3 – 2004/5 40,500,000.00
5. Human Resource Developmentand Institutional Building1996 172,000,000.00 2002/3 – 2004/5 98,000,000.00
Total ASIA Total Amount ASIA Total ASIA
Ongoing Projects: 593,600,000.00 Programming: 522,900,000.00
Since sometimes projects are not classified yet according to the DAC codes, they might be shown under other sub-categories.  Th is suggests that although the amount for projects for the
macroeconomic stability is presented as 0, there might be some projects which help the macroeconomic stability but which are cl assified into another sub-group.
Asia:  Afghanistan, Bangladesh, Bhutan, Cambodia, Chine, India, Indonesia, Lao, Malaysia, North Korea, Philippines, Sri Lanka, Thailand and Vietnam.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.WT/WGTI/W/163
Page 10EC Technical Assistance and Capacity Building Programmes related to FDI (cont'd)
Region:  WEST BALKANS (CARDS)
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 2000 111,154,200.91 2002-2004 432,400,000.00
2. Macroeconomic Stability 2000 15,620,916.00 2002-2004 9,800,000.00
3. Legal and Policy Frameworks 2000 40,800,000.00 2002-2004 323,100,000.00
4. Private Sector Support 2000 52,620,501.28 2002-2004 10,500,000.00
5. Human Resource Developmentand Institutional Building2000 223,200,000.00 2002-2004 357,500,000.00
Total CARDS Total Amount CARDS Total CARDS
Ongoing Projects: 443,395,618.19 Programming: 1,133,300,000.00
Cards:  Albania, Bosnia Herzegovina, Croatia, Federation Serbia and Montenegro, Former Yugoslav Republic of Macedonia, Kosovo.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.WT/WGTI/W/163
Page 11EC Technical Assistance and Capacity Building Programmes related to FDI (cont'd)
Region:  LATIN AMERICA
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 1994 53,711,516.00 2000-2006 124,000,000.00
2. Macroeconomic Stability 1997 58,177,040.00 2000-2006 58,900,000.00
3. Legal and Policy Frameworks 1993 133,894,587.00 2000-2006 345,000,000.00
4. Private Sector Support 1991 174,746,523.00 2000-2006 144,000,000.00
5. Human Resource Developmentand Institutional Building1994 254,660,896.00 2000-2006 189,050,000.00
Total LATIN AMERICA Total Amount LATIN AMERICA Total LATIN AMERICA
Ongoing Projects: 675,190,652.00 Programming: 860,950,000.00
EU FDI 1996-2001 152,798,000,000.00
Latin America:  Argentina, Brazil, Bolivia, Costa Rica, Colombia, Chile, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nic aragua, Panama, Peru, Paraguay, Uruguay, Venezuela.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.WT/WGTI/W/163
Page 12EC Technical Assistance and Capacity Building Programmes related to FDI (cont'd)
Region:  SOUTHERN MEDITERRANEAN AND THE MIDDLE EAST (MEDA)
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 1999 158,500,000.00 2000-2006 96,000,000.00
2. Macroeconomic Stability 1995 292,000,000.00 2000-2006 130,000,000.00
3. Legal and Policy Frameworks 1996 160,000,000.00 2000-2006 316,000,000.00
4. Private Sector Support 1999 759,650,000.00 2000-2006 86,000,000.00
5. Human Resource Development
and Institutional Building1996 368,260,000.00 2000-2006 63,000,000.00
Total MEDA Total Amount MEDA Total MEDA
Ongoing Projects: 1,738,410,000.00 Programming: 691,000,000.00
Meda: Algeria, Egypt, Jordan, Lebanon, Morocco, Israel, Syria, Tunisia, Turkey, West Bank and Gaza Strip and Yemen.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.WT/WGTI/W/163
Page 13EC Technical Assistance and Capacity Building Programmes related to FDI (cont'd)
Region:  EASTERN EUROPE AND CENTRAL ASIA (TACIS)
Ongoing Projects Programmed Projects
Objective / Area of Activity Year, when the first project
startedTotal amount for ongoing projects
in EuroProgramming Period Total amount for programming in
Euro
1. Infrastructure 2000 25,025,504.00 2002-2003 140,500,000.00
2. Macroeconomic Stability 2000 30,729,985.00 2002-2003 0.00
3. Legal and Policy Frameworks 2000 15,500,000.00 2002-2003 139,500,000.00
4. Private Sector Support 2000 30,289,528.00 2002-2003 116,000,000.00
5. Human Resource Developmentand Institutional Building2000 62,600,000.00 2002-2003 47,600,000.00
Total TACIS Total Amount TACIS 164,145,017.00 Total TACIS 443,600,000.00
Ongoing Projects: Programming:
Tacis:  Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russian Federation, Tajikistan, Turkm enistan, Ukraine and Uzbekistan.
Source: European Commission, Directorate General (DG) External Relations, DG Development and DG EuropeAid, Eurostat.
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