In this respect, it should not be forgotten that existing WTO agreements, e.g. GATS, contain provisions on investment. The present situation as to the openness of countries' domestic markets to Foreign Direct Investment differs greatly among WTO Members. The European experience of openness towards foreign investors is positive. Thus an approach along the lines of the GATS model, based on commitments undertaken by each Member, is the way to allow for the flexibility that many WTO Members require. Protection of investment and right to regulate International rules on Foreign Direct Investment protection contribute to create a favourable investment climate that benefits both international investors and host countries.
Further reflection is needed on the question of investment protection rules.
Rules of this kind are enshrined in many bilateral or regional investment treaties, but in some cases they have been subject to unexpected and controversial interpretations. Thus international rules on FDI, while aimed at encouraging FDI flows, should preserve the ability of all host countries to regulate, in accordance with basic WTO principles, the exercise of economic activity on their territory. These rules must respond to the concerns expressed by civil society concerning their impact on the environment and labour conditions. Developing WTO Members have the additional concern of ensuring the compatibility of the activities of foreign investors with their developmental policies and objectives. The potential of FDI to contribute significantly to economic growth in both home and host countries is being increasingly recognised.