At the end of 2013, the European Union and China announced the start of negotiations on a bilateral investment agreement. This will be the first agreement signed by the European Union as a partner, and not by its Member States. However, almost all Member States of the European Union have already signed, this type of agreement with China. This raises the question of the added value of new contracts entered into by the European Union. Is the new agreement is able to attract new investors?
The aim of this study is to demonstrate how agreements concluded by the EU countries have influenced the volume of stock of foreign direct investment. This paper proposes an analysis of BIT and FTA&EIA agreements and then conducted an empirical study based on FDI stocks of the European Union countries.
Anatomy of investment agreements of the european union
1. ANATOMY OF INVESTMENT AGREEMENTS OF THE
EUROPEAN UNION AND ITS MEMBER STATES
Magdalena Słok-Wódkowska
Faculty of Law and Adminitration UW
Katarzyna Śledziewska
Faculty of Economics Sciences UW
2. Introduction
• The aim of this study
– to demonstrate how agreements concluded by the
EU countries have influenced the volume of stock
of FDI.
1. An analysis of BIT and FTA&EIA agreements
2. An empirical study based on FDI stocks of the
European Union countries
3. Bilateral Trade Agreements (BIT)
• Concluded usually with two parties only
– protection and promotion of foreign investements
• Broad definition on investments
– all assets that are owned or controlled by an
investor directly or indirectly
• Traditionally between developing countries
with developed
– trend has changed recently
4. Free Trade Agreements & Economic
Integration Agreements (FTA&EIA)
• Bilateral, multirateral, between groups of
coutries
• Preferential trade liberalisation of trade in
goods (FTA/CU) and services (EIA)
5. BIT
• Aim: protection of
investments, mainly against
expropretion
• Outside the scope of the
WTO law
• Usually bilateral
• Traditionally concluded
between parties whose
mutual trust is limited
FTA&EIA
• Aim: liberalization of
investing in partner
territory,
• Regulated by the WTO,
permitted by the Article V
GATS
• Both multilateral and
bilateral
• Requires mutual trust and
cooperation between
parties
6. EU BITs and RTAs
BIT
• Concluded individually by EU MS (EU
can since XII 2009)
• Since 1959 MS concluded 1326 BITs
with non-EU parties
• Germany 120 BITs,
• UK, France, Italy, Belgium,
Netherlands and Spain between 91
and 73,
– majority of them with developing
countries
• CEE with developed partners (US,
Canada, Japan)
• China and Turkey have BITs with all
EU MS
– except Ireland
RTA
• Concluded by the
EEC/EC/EU
• 32 FTA, CU & EIA
notified to the
WTO
7. Number in BITs concluded by EU
Member States, 1960-2012
0
10
20
30
40
50
60
70
80
90
100
8. ?
• Is there any impact of BITs or EIAs on FDI
outward stock?
• 4 groups of countries
– BIT
– FTA&EIA
– EU
– ROW
• Data: bilateral, MS EU FDI stock, abroad,
Eurostat
9. EU’s FDI (outward stocks) in different
country groups, in bln EUR
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
UE
ROW
BIT
FTA&EIA
10. Dynamics of growth of the EU’s
outward FDI stocks, 2000 = 100
-
100
200
300
400
500
600
UE
ROW
BIT
FTA&EIA
11. Share in total EU FDI outward stock,
in%, 2000-2012
-
5.00
10.00
15.00
20.00
25.00
30.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
BIT
FTA&EIA
12. Changes in significats of different
coutry coup in EU FDI outward stock
(10.00)
(5.00)
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
ROW BIT FTA&EIA
2012
2012/00
13. The impact of BITs and RTAs on FDI
• Small but increasing
– No FTA&EIA agreements with main partners
(United States, Brazil , Canada , Bermuda, Russia)
– BITs yes (USA , Canada) but it’s recent
• What about the impact?
