G20 Guiding Principles for Global Investment Policymaking: A Stepping Stone for Multilateral Rules on Investment
Implemented jointly by ICTSD and the World Economic Forum, the E15Initiative was established to convene world-class experts and institutions to generate strategic analysis and recommendations for government, business, and civil society geared towards strengthening the global trade and investment system for sustainable development.
Since its creation in 1999, but particularly since its first leaders’ summit in November 2008 and its institutionalisation in 2010, the G20 has gathered leading countries to diagnose, discuss and work together towards a global recovery. Each G20 member, in turn assuming the presidency, has sought to shape the agenda and focus on concrete issues of international relevance to boost the economic recovery from the global financial crisis.
One of the most important and concrete outcomes of China’s G20 presidency was the establishment of a Trade and Investment Working Group (TIWG), recognising that robust and sustainable trade and investment reinforces economic growth and calling for enhanced G20 trade and investment cooperation. The Chinese presidency’s renewed approach was not only to bring stand-alone investment issues to the G20 table, but also to re-spark the conversation on investment and trade policymaking by bringing them closer together again, acknowledging the complementarity of trade and investment as the engines of economic growth. This has paved the way for coherent, integrated discussions on trade and investment for the first time in 15 years in the global political arena.
On the investment side, the TIWG delivered the G20 Guiding Principles for Global Investment Policymaking (G20 Guiding Principles), a key outcome of the Chinese presidency. These were endorsed by trade ministers in Shanghai in July 2016 and then by heads of state at the Hangzhou Summit in September 2016, with the objective of fostering an open, transparent and conducive global policy environment for investment; promoting coherence in national and international investment policymaking; and promoting inclusive economic growth and sustainable development.
This paper introduces the G20 Guiding Principles, beginning with a background review of their crafting and various attempts at devising guiding principles on international investment, and identifying some of the guidelines that have paved the way for the Principles. It also outlines the objectives, scope and content of the G20 Guiding Principles and considers their potential impact on policymaking at the domestic and international levels.
Further to this analysis, the paper considers the broader work of the G20 TIWG, including the trade and investment linkage, analyses the general state of play of G20 countries’ investment agreements, and offers some preliminary conclusions and ways forward.
Understanding these new global principles on foreign direct investment (FDI) policymaking will be relevant for businesses, host and home countries alike, as they navigate a world of turmoil and controversy on the role and rights and obligations of FDI.