Trade and investment rules: Latin American perspectives

Latin American countries rank among those that have displayed the greatest amount of rule-making activism towards foreign direct investment in recent decades. The region has witnessed a steady opening of investment regimes. Alongside domestic (or autonomous) investment regime liberalization, Latin American countries have engaged in a large number of international negotiations dealing with investment matters. Virtually all of them are today members of the World Trade Organization, are party to one or more regional integration agreements featuring comprehensive disciplines on the protection and liberalization of foreign investors and their investments, and are parties to numerous bilateral investment treaties. This paper depicts the changing international landscape of investment rule-making from a Latin American perspective. It does so by looking first at the recent evolution of investment rules at the bilateral, regional and multilateral levels, pointing out differences and synergies between these closely intertwinned processes and the role that Latin American countries have had in shaping them. Against the backdrop of repeated failures at developing a comprehensive set of investment disciplines at the multilateral level, the paper reviews the main arguments that have been recently advanced in favor and against global rules for investment. The paper dissects the main reasons why investment fell off the negotiating agenda of the Doha Development Agenda at the WTO. It concludes by drawing a number of policy lessons regarding the most optimal institutional settings in which to pursue various elements of investment rule-making and sketches a few forward-looking scenarios on investment rule-making at the multilateral level.