MJIEL Vol 14 Issue 1 2017 - Article 3

Bilateral Investment Treaties as Tools for Enhancing Foreign Investment Climate and Increasing Competitiveness
Rawan Al-Louzi
 
ABSTRACT: Although foreign investment is mainly protected through national laws, the wide-spreading network of bilateral investment treaties (BITs) aims to ensure a certain standard of protection. BITs demonstrate far-reaching implications at both treaty level and international level. The main objective of these treaties is to promote foreign investment as reflected in the titles of virtually all BITs. They are viewed as tools for reducing risk that foreign investors would otherwise face, and the reduction of which encourages investment. Thus, the value of BITs depends on the level of risk reduction and stability through providing clear and enforceable rules that protect foreign investment and create a favourable investment climate. The aim of this paper is to look at the role of BITs in enhancing foreign investment climate and therefore increasing competitiveness. The assumption is that the more these treaties grant protection the better they serve as tools for enhancing foreign investment climate and increasing competitiveness. However, too much protection may leave states parties unable to meet their other duties and obligations.

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