International Business Law

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TABLE OF CONTENT: Pg
1. Introduction……………………………………………………………………… Significance of trade and investment to world economic growth Overview of trade and investment law

2. Trends in Trade and Investment……………………………………………… Volume of trade and investment in the last 5yrs in terms of growth Contribution to global economy
FDI and Developing nations

3. Effects of Trade liberalization………………………………………………… Discuss trade liberalization and legal principles
Discuss the legal, political and economic effects of Free
-Flow of goods and services
4. Foreign investment in the global economy…………………………………….. The global economy and foreign investment law
Impact of globalization on foreign investment law

5. Conclusions………………………………………………………………………

6. Bibliography………………………………………………………………………

7. References………………………………………………………………………

8. Appendices………………………………………………………………………

1. Introduction
Trade and investment are interconnected in real life and in policy. Trade is generally defined as the exchange of goods and services. In today’s globalized world, and especially among policy makers and academics, it is used to refer to the sale of goods and services across national borders (exporting and importing). Investment is broadly defined as devoting resources to an activity that is expected to generate future returns. Trade and Investment Law:

The Sovereign States in the 19th century were the pioneers in laying down the principles of the International Investment Law, made in order to protect their own citizens from deals with foreign states, and the gradual changing led to the markets to sanction misconduct by deviant host states. FDI or Foreign Direct Investment is simply the direct investment in physical assets to market and/or produce in a foreign country. Holding or acquiring a 10% or higher equity, joint ventures, licensing, Greenfield operations are all types of FI. (Lecture Notes: Week 2 Foreign Investment Law)

BIT – 2200- Protects Investors from developed countries in developing and now transition countries. But for political acceptance they are formulated as reciprocal obligations. For Example: A company has a number of options for investing abroad. It can own facilities through which it makes products and/or sell services directly in another country (foreign direct investment). A company can also lend its name and/or technology to another company to produce a good or service (through some sort of a licensing agreement, for example). Foreign direct investment and licensing agreements often generate the need for more imports, and thus trade. Investing in foreign businesses through purchasing the stock of a company is called portfolio investment, and is a form of indirect investment. Indirect investment may have no direct impact on trade and do little, if anything, to support development (e.g. if it tends to be speculative in nature). Trade and investment can have a wide range of effects on development depending on a critical set of factors, including: the durability and stability of trade and/or investment; their effects on employment, income, natural resources and cultures; and, if and how profits are re-invested. The receiving government’s regulatory structure is also important to consider in assessing the impact of trade on development. CASE EXAMPLE (S):

In the wake of rising FDI from developing and transition economies several investment disputes have emerged with investors from these economies as claimants, by the end of 2005, 24 of the 226 known treaty-based investor-State disputes (approximately 10%) had been filed by investors from a developing or transition economy. With one known exception, all were filed against governments in other developing countries or economies in transition. The most cases have been filed against Chile (5), Argentina (3) and Peru (2). Claimants were predominantly from Chile (5), Argentina and the Russian Federation (3 each), followed...
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