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*Columbia FDI Perspectives*
Perspectives on topical foreign direct investment issues
No. 259  August 26, 2019
Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Alexa Busser ([log in to unmask])
*Investment facilitation for sustainable development: Getting it right for
developing countries*
* <#m_-3748688790506410967__edn1>
Howard Mann and Martin Dietrich Brauch**

Over the past 18 months, multiple *Perspectives* have argued for the WTO to
initiate negotiations on investment facilitation.[1]

A common foundation has been the view that trade and investment are just
two sides of the same coin; hence drafting an investment-facilitation
agreement is just a matter of replicating its close sibling on trade
facilitation. This simplistic view ignores many realities. Trade happens in
an instant and generally implicates a limited number of actors and domestic
laws. Paperwork related to traded goods is limited and very specific.
Investment, by contrast, is a process that happens over decades and
implicates a vast array of laws, both when initiated and over its lifespan.
More critically, any given investment can impact a wide range of economic
actors and community stakeholders, positively or negatively. Approvals
often require complex review and decision-making processes taking two to
three years, applying very different environmental, social and economic
criteria compared to trade. While there are economic relationships between
trade and investment, this does not make regulating them akin to regulating
siblings, or even cousins.

The argument is becoming dangerously misleading. It is being used to expand
the scope of WTO rule-making directly into the heart of national investment
law, by disciplining government decision-making on investment for
sustainable development. The history of the WTO shows it is unqualified to
intrude into these detailed and extensive legal aspects of sustainable
development at the national or international levels. Investment is too
critical for sustainable development for WTO experiments in this regard.

Worse, the push to promote investment-facilitation negotiations at the WTO
is taking place in the absence of empirical analysis of what investment
facilitation for sustainable development means and requires. In August
2018, the authors helped facilitate a workshop with 13 members of the
Southern African Development Community (SADC).[2]
<#m_-3748688790506410967__edn3> OECD and UNCTAD research used as background
for the meeting showed that even these major organizations recognize that,
although “investment facilitation stands increasingly high in the global
economic agenda,” “little conceptual research has been undertaken on the
topic.”[3] <#m_-3748688790506410967__edn4> This gap becomes even more
pronounced in the context of facilitating investment for sustainable

The workshop rigorously analyzed the investment-facilitation goals and
needs of the SADC members, based on proposals by UNCTAD
the OECD
and the WTO
During the workshop, the government participants evaluated each identified
item and ranked it by what level of governance is best suited to deal with
it: national, regional or multilateral. They also ranked what type of tool
should be used, including capacity building, research, technology
development, and legal obligations on governments. Moreover, delegates
identified issues and actions not included in the organizations’ catalogues.

The result of this bottom-up analysis by these developing country experts
in attracting and assessing potential FDI for admission was stark. Not one
element of the array of items was identified as best addressed by
negotiating obligations at the international level. Instead, a rather
sophisticated mix of national, regional and multilateral actions was
identified as best able to meet the needs of developing countries. Removed
from the context of a meeting organized by the WTO Secretariat or states
actively promoting a multilateral agreement, the workshop participants
rejected negotiating obligations at the international level.

Rather, the main needs identified focused on technical assistance for
assessing applications and enhancing informed decision-making processes,
benchmarking best practices, applying innovative technologies to enhance,
but not replace, regulatory decision-making, and generally better
collaborative processes to understand investments and investors. These
elements reflected a major concern to develop the capacity of governments
properly to analyze investment proposals, the character of potential
investors based on their track record in other states and the sources of
investment funding.

The SADC workshop appears to be the first time that developing countries,
in particular smaller economies, were asked to identify what they actually
think is needed. The rebuke of top-down negotiations is instructive, as is
the clear identification of the need for support to governments to make
better informed decisions as the top priority for identifying best
practices in facilitating investment for sustainable development, and the
support developing countries need to implement them. Given this, UNCTAD and
the OECD, working together with developing countries, are best placed to
assist most of them, especially those with smaller economies and those not
primarily concerned with outward FDI opportunities.

The need to stop WTO negotiations before they start—and move the next stage
of investment-facilitation work to organizations that focus on research,
best practice and capacity building—is based on a recognition of the
legitimate views of the majority of developing countries that did not
support investment-facilitation discussions at the WTO as the wrong
solution to an important issue. Smaller developing countries, in
particular, need to determine their needs for facilitating investment for
sustainable development. Their needs should not be suppressed by top-down
demands to help move the WTO into the core of investment decision-making
for sustainable development.

* <#m_-3748688790506410967__ednref1> *The Columbia FDI Perspectives are a
forum for public debate. The views expressed by the author(s) do not
reflect the opinions of CCSI or Columbia University or our partners and
supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed
**** Howard Mann ([log in to unmask]) is the Senior International Law
Advisor for the International Institute for Sustainable Development, IISD;
Martin Dietrich Brauch ([log in to unmask]) is an International Law
Advisor at IISD. The authors are grateful to Ahmad Ghouri, Felipe Hees and
Kavaljit Singh for their helpful peer reviews.
[1] <#m_-3748688790506410967__ednref2> For example, *Perspectives* 243
and 226
[2] <#m_-3748688790506410967__ednref3> The full report is available
Investment Facilitation Workshop
[3] <#m_-3748688790506410967__ednref4> Ana Novik and Alexandre de
Crombrugghe, “Towards an international framework for investment
facilitation,” *OECD Investment Insights*, p. 1, April 2018,
*The material in this Perspective may be reprinted if accompanied by the
following acknowledgment: “Howard Mann and Martin Dietrich Brauch,
‘Investment facilitation for sustainable development: Getting it right for
developing countries,’ Columbia FDI Perspectives, No. 259, August 26, 2019.
Reprinted with permission from the Columbia Center on Sustainable
Investment (***
A copy should kindly be sent to the Columbia Center on Sustainable
Investment at **[log in to unmask]* <[log in to unmask]>*.*

For further information, including information regarding submission to the
*Perspectives*, please contact: Columbia Center on Sustainable Investment,
Alexa Busser, [log in to unmask]

*Most recent Columbia FDI Perspectives*

   - No. 258, Carlo de Stefano, ‘How to limit treaty shopping,’ August 12,
   - No. 257, Yong Liang, ‘Challenges for the EU-China BIT negotiations,’
   July 29, 2019
   - No. 256, Evan Gabor and Karl P. Sauvant, ‘Incentivizing sustainable
   FDI: The Authorized Sustainable Investor,’ July 15, 2019

*All previous FDI Perspectives are available at *
*. *

*Other relevant CCSI news and announcements*

   - *On September 5, 2019*, CCSI begins its 14th annual International
   Investment Law and Policy Speaker Series
   Speakers will include: Taylor St. John, Paolo Di Rosa, Grant Hanessian,
   Martti Koskenniemi, Mouhamadou Kane, Abrão Miguel Árabe Neto, and Kyla
   Tienharra. The series, moderated by Grant Hanessian, Maria Chedid and Kabir
   Duggal, is generously co-sponsored by Baker McKenzie and Arnold & Porter.
   All talks will take place in Jerome Greene Hall, Columbia Law
School. *Please
   see our website
   for the schedule and more details. *
   - *On September 25, 2019*, CCSI, will host its 14th Annual Columbia
   International Investment Conference: “Aligning Corporations with the
   Sustainable Development Goals.”
   conference aims to clearly define SDG-aligned corporate activity in order
   to bring coherence and rigor to SDG measurement, reporting, and tools,
   helping to avoid the divergence and incoherence that has undermined the
   usefulness of ESG criteria and tools to date. *For more information, and
   to register, please see our website here
   - *On September 25, 2019*, CCSI, the UN Sustainable Development
   Solutions Network (SDSN), and Le Club des Juristes, with support from
   Iberdrola and under the guidance of Prof. Jeffrey Sachs, Special Advisor to
   the UN Secretary-General on the SDGs, and Laurent Fabius, President of the
   Constitutional Council of the French Republic, will host a conference to
   discuss the Global Pact for the Environment
   . *For more information, and to register, please see our website here
   - *On September 27, 2019*, CCSI, the Sabin Center for Climate Change
   Law, Landesa, and Wake Forest Law School will be hosting a day-long
   conference on the intersection between land use, the climate crisis and
   clean energy transition, and human rights. *For more information, and to
   register, please see our website here

Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
Ph: (212) 854-0689
Fax: (212) 854-7946
*Copyright © 2019 Columbia Center on Sustainable Investment (CCSI), All
rights reserved.*
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*Karl P. Sauvant, PhD*

*Resident Senior Fellow*
*Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
| p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask]
| w: | t: @CCSI_Columbia

"Incentivizing sustainable FDI: The Authorized Sustainable Investor", "The
potential value-added of a multilateral framework on investment
facilitation for development", "Promoting sustainable FDI through
international investment agreements", "Determining Quality FDI", "The State
of the International Investment Law and Policy Regime", "Towards G20
Guiding Principles on Investment Facilitation for Sustainable Development",
"Five Key Considerations for the WTO Investment-facilitation Discussions,
Going Forward", "Arriving at Sustainable FDI Characteristics", "Putting FDI
on the G20 Agenda", "International Investment Facilitation: By Whom and for
What?", "Moving the G20's Investment Agenda Forward", "Sustainable FDI for
Sustainable Development", "Towards an Investment Facilitation Framework:
Why? What? When?", "Beware of FDI Statistics!", "Towards an Indicative List
of FDI Sustainability Characteristics", and "The Evolving International
Investment Law and Policy Regime: Ways Forward" *are* available at and

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