in: G20 Hangzhou Summit 2016: proposals for trade, investment, and sustainable development outcomes, Geneva: International Centre for Trade and Sustainable Development (ICTSD), 63-70
One of the recurrent debates on international investment rule-making, often with a reference to the G20, relates to the question of whether it is possible and desirable to establish a multilateral investment agreement (MIA). We currently observe a renaissance of the debate about an MIA after past attempts to establish a Multilateral Agreement on Investment failed in 1998 at the OECD and in 2003 as part of the Doha Development Agenda of the World Trade Organization. The proponents point to recent fundamental changes in the international investment regime that speak in favour of a resumption of negotiations about an MIA (Åslund 2013; WEF 2013; Lin 2015; Hufbauer and Schott 2015).
The main question driving the international debate should not be whether it is possible to establish an MIA (function follows form). What is more important is the question of whether the institutional form of an MIA is suitable for effectively solving the most pressing challenges in the current investment regime (form follows form). It is not very likely that an MIA would pass the latter test, as I argue in this article, since an MIA would not lead to significantly more FDI flows or give stronger consideration to the interests of the developing countries. An MIA will most likely also not lead to greater coherency between the investment rules and other policy areas.
Given the existing complex structure of the international investment regime, it is inevitable that these challenges will be tackled at various levels (national, bilateral, and regional). Negotiations at the various levels should be supplemented by coordination efforts on the global level. The G20 is the appropriate orchestrator for talks about these overarching questions, talks which in turn should be carried on with the inclusion of the OECD, WTO, and the United Nations Conference for Trade and Development (UNCTAD), and other stakeholders.