What it is
The OECD has played a major role in highlighting the contribution of international investment to growth worldwide by advancing investment policy reform and international co-operation. The OECD Declaration on International Investment and Multinational Enterprises constitutes an important policy commitment to improve the investment climate. First adopted in 1976, the Declaration is a commitment by adhering governments to provide an open and transparent environment for international investment and to encourage the positive contribution multinational enterprises can make to economic and social progress. The Declaration consists of four elements: National Treatment, Conflicting Requirements, International Investment Incentives and Disincentives, and the Guidelines for Multinational Enterprises (OECD MNE Guidelines) . In addition, through its Policy Framework for Investment (PFI) which was updated in 2015, the OECD has provided a comprehensive and systematic approach for improving investment conditions in both OECD member and non-member countries.
Why it matters
Investment liberalization has been an essential prerequisite for economic growth worldwide over the past decades. However, new restrictive measures are being introduced and foreign investors are witnessing a revival of restrictive foreign investment regulation. Restrictions on FDI through various forms of investment protectionism can have significant adverse economic consequences for the global economic system overall and as a consequence for job creation, which is urgently needed. Hence, it is necessary to shed light on the issue of investment protectionism both at the national level and through international dialogue and cooperation.
How it impacts
We live in a highly competitive global environment where investors need adequate protection when making important decisions. The OECD and its Freedom of Investment Roundtable have a key role to play in helping policy makers to put in place a supportive business environment and refrain from putting protectionist measures in place. Truly open investment flows require: adherence to the rule of law and to effective dispute settlement; assurance of fair and non-discriminatory treatment for foreign investors; freedom to own and control one’s own investment; adherence to key principles and declarations, such as the OECD Declaration on International Investment and Multinational Enterprises. BIAC has urged the OECD to embark on an ambitious pro-active investment program and confirm the Organization’s leading role in ensuring that markets are kept open for foreign investment, with a view to boost economic growth and foster job creation.