The G20 Should Initiate a Multilateral Investment Agreement Anders Åslund Peterson Institute for International Economics Think 20, Moscow December 11, 2012

Purpose of G-20 To initiate major projects or policies outside of the agenda of ordinary international organizations

Why the G-20 Should Promote a Multilateral Investment Agreement Foreign Direct Investment is huge and has skyrocketed FDI has become rather balanced Lots of international investment treaties show need WTO is the natural venue

Why the G-20 Should Promote a Multilateral Investment Agreement (1) FDI is huge and has skyrocketed: From $27 billion in 1982 to $2.2 trillion in 2007 = Increased 100 times in 25 years

Why the G-20 Should Promote a Multilateral Investment Agreement (2) FDI has become a rather balanced two-way stream Multinational corporations (MNCs) belong to both developed and emerging economies

Outward FDI: 1980-2011

Inward FDI: 1980-2011

Why the G-20 Should Promote a Multilateral Investment Agreement (3) Proven need for standardized international (end 2011): 2,833 bilateral investment treaties (BITs) 331 other international agreement with investment protection (mainly FTAs)

Why the G-20 Should Promote a Multilateral Investment Agreement (4) WTO is the natural venue: Negotiations in OECD failed in 1998 – too small group and not limited to OECD Trade and investment are ever more integrated No competing agency Was part of Doha Round but dropped out

Problems Difficult to agree on conflict resolution Some countries oppose MIA

Possible Solutions Plurilateral agreement within the WTO leaving opponents out Leaving conflict resolution rather open Alternative: Continue to broaden regional investment agreements

Conclusions The need for an MIA has never been greater The obstacles to an MIA have never been smaller But after 9 years of no discussion a major impetus is needed. The G-20 could provide that, and Russia would be an ideal initiator