Paper Summary:

This paper studies two different approaches to international investments: The multilateral approach, which is favored by developed nations and the bilateral approach, which is favored by developing nations. As the paper explains, since the negotiations on MAI (Multilateral Agreement on Investments) fell apart, the developed world has been attempting to renew the effort through the other world bodies like WTO. This paper examines which of the above approaches is most suited to the world and in particular to the developing countries. The paper also asks whether a multilateral approach will necessarily lead to increased global FDI inflows. This paper ultimately proves that one size does not fit all, since investments are too sensitive and complicated to be governed by an umbrella agreement covering the entire world. Thus, the paper concludes, the WTO's attempt to address non-commercial factors through a multilateral agreement may not be worthwhile. Further, the paper recommends that if the WTO is to increase FDI, it should continue to concentrate on trade rather than bringing investments under a multilateral arrangement.

Table of Contents:
Acknowledgements
List of Tables
List of Figures
List of Appendices
Introduction
Need for Study
Objectives
Hypothesis
Limitations
Chapterization
Literature Review
Theories on International Trade
Theories on FDI
What factors determine the FDI?
Is Global FDI Tariff Jumping?
Multilateralism & Bilateralism
The Doha Round
The Cancun & Hong Kong Round
India's Reservation on WTO
Methodology
Methodology
Source
Assumptions
Expected Outcome
Results & Findings
Findings from Time Series Data
Findings from Cross Section Data
Conclusions & Policy Recommendations
Suggested Areas for Further Research
Bibliography
End Notes
Tables
Figures
Appendices

From the Paper:

"At present, the foreign investments are protected under the BITs (Bilateral Investment Treaties) and certain other regional arrangements. Since the 1960s, the BITs have increased greatly in numbers and today there are more than 2300 BITs (Source -UNCTAD). There has been a sustained debate between the developed and the developing world on the utility and/or continuance of BITs. The stand of the developed world is that the BIT is an inadequate protection since it often (not always) subordinates investment disputes to the local laws of the host country rather than international arbitration. Also, the process of negotiations of BITs is costly and time consuming. The western world also holds the view that the BITs do not sufficiently address the issue of transparency, predictability and stability of the FDI regime of the host countries."

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