For investing companies, foreign investments are associated with political as well as economic risks. Investment agreements can reduce the political risks and thus promote growth. Germany has been a pioneer of investment protection in international law, and is the country with the largest number of such agreements. They form an important pillar of German industry’s success around the world.
Investment protection has been an important component of the TTIP talks with the United States from the outset. The outcome of the negotiations between these two major global economic blocs in the area of investment protection will set the international trend on this issue.
BDI is calling for TTIP to include robust investment protection provisions with investor-state dispute settlement (ISDS). The TTIP talks should be used to advance important reforms in this field: protecting the “right to regulate” and exceptions under GATT Article XX; improving transparency in ISDS; narrowing the definition of central concepts such as “indirect expropriation”; development of an appeals instance; protection against abusive actions. TTIP can become the “gold standard” for other investment protection agreements. BDI has published concrete proposals in a position paper and in its statement to the European Commission’s consultations on investment protection.