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India signs treaties under UNCTAD auspices

Our Bureau

NEW DELHI, July 2

IN a flurry of intensive negotiation initiatives undertaken over the past two weeks by the UN Conference on Trade and Development (UNCTAD), a dozen countries including India initialled as many as 22 bilateral investment treaties (BITs), paving the way fo r enhanced foreign direct investment (FDI) flows, particularly between developing and developed countries.

According to a statement by the Geneva-based UN body the following countries initialled treaties which are now ready for signature.

Cambodia with Croatia, Egypt, Lao People's Democratic Republic, Myanmar and the Philippines; Colombia with Egypt; Croatia with India, Lao People's DR and Peru; Egypt with Lao People's DR, Peru and the Philippines; Ghana with India, Indonesia and the Phil ippines; India with Lao's People DR and Peru; Indonesia with Peru and the Philippines; and Peru with the Philippines.

Agreements have been negotiated and agreed minutes have been signed ad referendum among the ensuing countries: Columbia with Croatia, India, Indonesia and the Philippines; Croatia with the Philippines and Indonesia; India with Myanmar and Indonesia with Iran.

UNCTAD said countries are increasingly concluding BITs in order to subserve and safeguard foreign investments and to foster economic cooperation with other countries. By signing BITs, developing countries in particular are sending a strong signal to the business community worldwide, as well as to their own investors, of their commitment in providing a predictable and stable legal framework designed to encourage both inward and outward investment with a view to augmenting FDI flows.

The aggregate number of bilateral investment treaties at the end of 1999 was 1,855 _ 130 more than the previous year involving 174 countries. Of these BITs, 498 were concluded among developing countries. The increased participation of these countries in such treaties has not been circumscribed to partners in the developed world.

Since the 1980s, developing countries have been signing more and more such treaties with other developing countries. More than 10 BITs have already resulted from the recent rounds of negotiations organised under the auspices of UNCTAD.

Supporting the negotiation of BITs is part of UNCTAD's work on increasing South-South cooperation. These negotiations held in Sapporo, Japan last fortnight followed the pattern of earlier negotiations of BITs and double taxation treaties organised by UNC TAD as part of its work programme on international investment agreements, which includes capacity-building seminars, regional symposia, training courses, dialogues between negotiators and groups from civil society and the preparation of issue papers.

Negotiators said that one advantage of bringing them together in a single location, like the one organised in Japan to work out BITs, is that it keeps the momentum going and provides them with an opportunity to exchange experience.

In two weeks, they were able to achieve an outcome that otherwise have required numerous contacts and as much as three or four years or more to score. The Sapporo round has been backed by the Government of Japan through funding from the UN Development Pr ogramme.