§ Mr. Stephen O'BrienTo ask the Chancellor of the Exchequer what assessment he has made of the value of a multi-national agreement on foreign private investment in developing countries. [103524]
§ John HealeyThe UK government recognises that foreign direct investment (FDI) is important for developing countries. It establishes long-term commitments and lasting assets, which bring new technologies, skills and products into developing countries. The UK Government has made an assessment that a basic framework of multilateral rules on FDI will reinforce sound domestic policies to attract FDI. Such a framework would help developing countries send a positive signal to potential foreign investors about the permanence of policy changes and the expected standard of treatment afforded to foreign investors.
Existing multilateral rules only partially cover FDI issues, and the proliferation of bilateral investment treaties does not provide a substitute for a coherent, basic framework of multilateral rules. Moreover, the UK government believes that the proposed agreement will have particular benefits for smaller developing countries which do not have the resources to negotiate numerous bilateral treaties or devise and implement an investment regime independently. We believe that the EU proposal under which WTO members would choose which sectors they wish to open up to FDI, offers a balanced and flexible approach, preserving countries' right to regulate in order to pursue national development objectives.