WRITTEN QUESTION No. 1136/96 by Amedeo AMADEO to the Commission. Worldwide harmonization of regulations on direct investment
Date: 1996-05-13
Institutions: AMADEO, European Parliament
Subjects: OECD, direct investment, equal treatment, export of capital, foreign investment, international negotiations, investment aid, investment promotion, multilateral agreement













EUR-Lex - 91996E1136 - EN






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91996E1136

WRITTEN QUESTION No. 1136/96 by Amedeo AMADEO to the Commission. Worldwide harmonization of regulations on direct investment  


Official Journal C 297 , 08/10/1996 P. 0092 





WRITTEN QUESTION E-1136/96 by Amedeo Amadeo (NI) to the Commission (13 May 1996)Subject: Worldwide harmonization of regulations on direct investmentInternational flows of direct foreign investment have grown from US$ 68 billion in 1960 to US$ 1650 billion in 1993, which corresponds to an average annual growth rate of 11 per cent.UN and Eurostat statistics show that the rise in direct foreign investment at world level has been four times as fast as that of GDP and three times as great as that of trade.Will the Commission press for the dispute settlement procedures to be made compatible with those of the WTO and with the instruments for settling disputes between investors and states; for the local and regional authorities of the contracting states to be included in the agreement so as to remove the current elements of uncertainty; for the principle of national preference to be upheld, subject to the proper exceptions, so as to avoid the discrimination against national undertakings which occurs, for example, in the free zones dedicated to exports; and for the use of tax and direct incentives to attract direct foreign investment to be regulated more tightly since it also has repercussions for the beneficiary states?Answer given by Sir Leon Brittan on behalf of the Commission (20 June 1996)The Commission agrees that multilateral rules on investment have to apply to all levels of government.The Commission is aware of the need to ensure that dispute settlement rules are compatible with existing mechanisms. Concrete measures taken to ensure World trade organisation (WTO) compatibility include the participation of WTO experts in the ongoing discussions in the Organisation for economic cooperation and development (OECD) based negotiations on a multilateral agreement on investment (MAI). With regard to investment-to-state dispute settlement the International centre for the settlement of investment disputes (ICSID) will also contribute to this work.The Commission agrees that 'reverse discrimination', i.e. better treatment given to foreign investors than to national operators, could create problems with regard to a level playing field for all operators. However, in the ongoing OECD negotiations this has so far not been a major issue (so-called export processing zones where such practices are widely used are not a common feature within OECD).This issue will, however, have to be addressed in future discussions and negotiations on multilateral investment rules in the WTO.The Commission agrees that disciplines on investment incentives should be part of future multilateral investment rules. The state aid policy of the Community has already led to significant limits on investment incentives within the Community. This subject has already been taken up in the ongoing OECD-based negotiations.The guidelines for the participation of the Community and its Member States in the OECD based negotiations reflect to a large extent the answers given above.