Centro de Estudios de Estado y Sociedad The diffusion of BITs and policy degrees of freedom: A comparison between Latin American and Asian countries♠ . Leonardo E. Stanley♠♠ Abstract From a development perspective, the signature of bilateral investment treaties (BITs) always limits the degrees of freedom for national policy. In spite of the generalization of the bilateral scheme, the governments’ attitudes towards them are far from homogeneous, suggesting that a strategic stance toward BITs signature may be crucial. If the room for differentiation and strategic decisions before signing BITs is substantial, then we would expect a large variability in terms of commitments included in the clauses of the BITs signed and ratified. This is tested by comparing the BITs signed by Latin American and Asian countries. ♠ This research develops the research proposal that received the second prize in the Japanese Award for Outstanding Research on Development at GDN 6th Conference at Beijing. Global Development Network, January 2007 (http://www.jica.go.jp/gdn/conference/8th/contribute.html). However, the present paper reflects only preliminary results. A previous version was presented at the Sixth Annual Conference of the Euro-Latin Study Network on Integration and Trade (ELSNIT), held in Florence – Italy, at 24-25 October 2008 (http://www.iadb.org/intal/detalle_evento.asp?cid=259&origen=CA&id=367&idioma=ENG). ♠♠ Researcher at CEDES, e-mail lstanley@cedes.org Table of Contents 1. Introduction .................................................................................................................. 2 2. Latin America & Asia: Development Paths and Institutions. ...................................... 5 3. Investment Treaties Analysis ..................................................................................... 11 3.1 General clauses in BITs: is there any difference? ................................................ 13 3.2 BITs particular clauses or where the differences lie............................................. 19 4. Some [preliminary] conclusions................................................................................. 24 5. References .................................................................................................................. 27 Annexes........................................................................................................................... 31 Graphs Graph 3: BITs signed by Latin America & Asian countries .......................................... 12 Tables Table 1: FDI Stock as a percentage of GDP – Latin America ......................................... 7 Table 2: FDI Stocks as a percentage of GDP – Asia...................................................... 10 Table 3: BITs signed by region ...................................................................................... 12 Table 4: BITs - Most common investment definition .................................................... 15 Table 5: BITs – Investment Treatment & Protection ..................................................... 15 Table 6: BITs - Expropriation ........................................................................................ 16 Table 7: BITs – Reimbursement clauses ........................................................................ 17 Table 10: BITs - Duration .............................................................................................. 19 Annex – Tables Annex - Table 1: Latin America BITs............................................................................ 31 Annex - Table 2: Asian BITs.......................................................................................... 31 1 1. Introduction Since the early 1990s, foreign direct investment (FDI) is on the rise. In order to attract foreign investors, (developing) host countries not only altered both macro and industrial policies, but also they accepted an important institutional change. As a result, foreign investors were favored by the widespread adoption of a new institutional framework by developing countries. This framework included new investment legislation (either general or specific FDI laws), the signature of bilateral investment treaties (BITs) (for investors’ protection) and the propagation of a new dispute settlement scheme that allowed for investor-state cases. As a result of this “market friendly approach”, incoming FDI faced almost no restrictions in Latin American countries. However, this policy decision was not made in a vacuum, but rather it matched the region’s increasing disinterest with industrial policies that followed the collapse of the ISI model. After a decade deprived of growth achievements, most economies LA countries embraced neoliberal reforms with fervor, including aggressive privatization and deregulation programs and the opening of the economy. The new friendly approach towards foreign investors also included vigorously encouraging them to participate in the privatization and deregulation process. Policy makers throughout the region suddenly became exceptionally enthusiastic about markets. The Asian economic landscape also changed profoundly after the 1990s, and since then this region has become one of the most dynamic of the world. But, in contrast with Latin American ones, Asian economies relied on a policy-led industrialization process. Furthermore, this region followed a different approach towards foreign investors, as it was more careful about losing national policy space. On the one hand, despite signing several BITs and welcoming foreign investors, Asian countries maintained very restrictive rules towards foreign direct investment – FDI (APEC, 2003). Firstly, and even if many countries became more market-friendly after the 1997 crisis, FDI rules did not disappear. Secondly, for those industries where entry was formally allowed, foreign investors were still prevented from having a majority stake – this was the case, e.g. in Taiwan or in Philippines until recently. In other countries, FDI 2 was only permitted if associated with local partners – e.g. in China, India or Vietnam1. Thirdly, foreign investors had to submit their investment proposals before local authorities before permission was granted – e.g. in Thailand or in the Philippines. Last but not least, despite its enthusiasm towards the bilateral scheme, they continued to maintain several legal restrictions by circumvent some legal loopholes or by introducing some particular clauses. The information presented above may suggest different approaches and design of the BITs signed by Latin American and Asian countries. Previous empirical evidence in fact suggests that constraints imposed by BITs were not fixed (von Moltke, 2000; Peterson, 2004), that is to say, that different clauses can be found, e.g. associated to foreign investor’s rights (as concerns most favored nation and national treatment amongst others). Similarly, important differences might be found in terms of the dispute settlement (DS) scheme. The present paper seeks to explain the differences in the BITs signed by Latin American and Asian countries. The main objective of this paper is to analyze BIT main clauses and their regional differences, both at a general and a particular level. The focus mainly concerns the economic policy degrees of freedom implied by different clause design options. Those differences might help in explain why Latin American countries are rushing to defend at the ICSID headquarters, whereas there is almost no claims against Asian countries. In a first section, the paper introduces a brief description of institutions, FDI policies and development paths followed by these two groups of countries. In contrast to a widely disseminated (and rather simplistic and uniform) vision regarding FDI policies and development responses, the institutional response from the fast growing countries in the sample tended to be more varied. Furthermore, despite the symmetries that could arise within each region, responses were particular to each country. In other words, there was no single development path, but an array of them – both, among Latin American countries and Asian ones. 1 As an example, Vietnam Law on foreign investment considers three forms of investment: business corporate contract (BCC) (mandatory for telecommunications and oil); Joint-Ventures (JV) (required for a wide range of sectors, including transportation, tourism and culture), and 100 foreign ownership (Leroux & Brooks, 2004). 3 In a second section, two lines of analysis on BIT clauses are presented. Firstly, from a detailed analysis, the main clauses are identified. Secondly, a general analysis and comparison is made. If all agreements followed the same BIT design, there should be no considerable differences among clauses. That is, in general, the case when considering the BITs signed by Latin American countries. By contrast, it is well known that the scope of Asian BITs was fixed in accordance to national laws and policies (Kumar, 2007), and that these countries maintained some restrictive policies [until recently] towards foreign investors. Therefore, in practice, these countries narrowed the level of guarantees granted to foreign investors – something that did not happen in Latin America. In a thirdly and finally section, a series of conclusions and policy implications are introduced. 4 2. Latin America & Asia: Development Paths and Institutions. Until recently, developing countries (DCs) evaluated foreign direct investment (FDI) with distrust. Among Latin American countries, this was more notorious among those blessed with natural resources – mainly those rich in oil, gas and minerals2. Similarly, restrictions to FDI were also present in those countries pursuing an industrialization strategy (ISI model) even if quite a few of them profited from multinational firms (MNFs) in their “eclectic” approach towards industrialization. The same attitude could be observed in Asia, as reflected by the experience of Korea, Taiwan (Province of China), and India, all of which kept a check on foreign investors’ involvement in industrialization. However, there were also some important exceptions in both geographical areas. In Latin America, Brazil FDI cum industrialization policy in the seventies was exceptionally liberal at that time. In Asia, Singapore was among the first countries to welcome foreign investors as well as Malaysia and Thailand. By the end of the 1980s, caution turned into recklessness. The fall in export commodity prices along with the irruption of the debt crisis brought a policy change in Latin America, leading to a friendlier attitude towards foreign investors, who became the promise for the development process. Furthermore, industrial policies not only lost their leading role but also became all but “unspeakable”. While sheltered from the debt problem, Asian countries also became more open to foreign investors. But, at the same time industrial policies continued to lie at the center of the political discourse. However, since the late 1980s, the global economy experienced a sharp increase in FDI flows. Although most FDI was directed towards developed countries, flows into developing countries regained strength. This new phase initiated a soaring competition process (i.e., incentive wars) amongst developing countries in order to attract foreign investors (UNCTAD, 1996; Oman, 2000). Among selected Latin American countries, the triad formed by Argentina, Brazil and Chile (the former ABC group) accounted for more than 50% of total inflows over the 1991- 2005 period. In one single year, FDI inflows among selected countries 2 Since the 1950s most states in the region adopted a protectionist view, which later evolved into a more pessimistic opinion. As an example of this new climate, it worth to mention the Andean Pact Decision 24/1971 5 amounted up to US$ 73 billion3. At the individual country level, after receiving US$ 214 billion in 1991-2005, Brazil outstands as the first regional receptor (followed by Argentina and Chile) - and in the worldwide ranking, it comes second after China. Additionally, other countries in the region profited from important FDI inflows, notably Colombia, Venezuela and Peru. Even Bolivia (one of the poorest countries in the region) attained a good score, following the privatization program launched in mid 1990s. In each country FDI flows were mostly explained by privatizations, including the massive acquisition of formerly state-owned assets by MNFs, with Brazil as a latecomer (IDRB, 2005). In terms of sectors, most of the foreign investors appear attracted by the opportunities raised by the primary sector, comprising both energy (petroleum and gas), and minerals. Industry related FDI remained low, with the exception of those funds aiming at MERCOSUR automotive sector, of some specific opportunities in the Brazilian chemical industry and of the agro-business sector at both Argentina and Brazil (Mortimore, 2000). Another relevant fraction of incoming FDI was directed to utilities (mostly in the electricity and telecommunications sectors, but also to ports, trains, post services, water and sewage services), and financial services. Depending on the country and/or the sector, foreign investors were predominantly coming from either the US or the EU (Spain, France, Italy, Portugal and Great Britain), and also from Chile (this country became a net regional supplier of funds). US originated FDI ranked first in 11 countries: Bolivia (40,8%), Brazil (45,1%), Chile (26,4), Colombia (16,2%), Costa Rica (66,5%), Ecuador (42,2%), El Salvador (32,7%), Honduras (43,9%), Panama (25,1%), Paraguay (42,6%) and Venezuela (33,5%)4. Furthermore, the raising share of FDI stock on GDP suggests the growing influence of foreign investors since the eighties. In particular in Chile, this share passed from roughly nil at the beginning of the eighties to a significant 60% at present. In Panama, foreign investor involvement is also quite significant. For the rest of the countries, FDI stock share lies below 50% of GDP. In Brazil, the stock of foreign direct 3 At country level, this year was exceptional for Argentina after the selling of YPF. Individually, both Brazil and Chile attained their maximum FDI inflows in the year 2000. 4 Periods: Bolivia: 1992-01; Brazil: 1996-2005; Chile: 1974-2005; Colombia: 1994-2005; Costa Rica: 1997-2005; Ecuador: 1992-01; El Salvador 1998-05; Honduras: 1993-02; Panama: 1990-00; Paraguay: 02-05; and, Venezuela 1992-01. Most of the data come from ECLAC except those for Bolivia, Ecuador and Venezuela (Stanley 2007) 6 investment is quite low even if the country ranks among the main beneficiary of the FDI boom. To sum up, for the region as a whole, the FDI share is not significant, and (on average) not much different of the one observed among Asian countries. Table 1: FDI Stock as a percentage of GDP – Latin America Latin American 1980 1985 1990 1995 Countries Argentina 6,9 7,4 6,4 10,8 Bolivia 15,1 19,0 21,1 23,4 Brazil 7,4 11,5 8,0 6,0 Chile 3,2 14,1 33,2 23,8 Colombia 3,2 6,4 8,7 6,9 Costa Rica 13,9 24,4 25,3 23,3 Ecuador 6,1 6,2 15,2 19,4 El Salvador 4,3 4,8 4,4 3,1 Guatemala 8,9 10,8 22,7 15,0 Honduras 3,6 4,7 12,6 16,5 Nicaragua 5,1 4,1 11,4 19,2 Panama 64,6 58,2 41,4 41,0 Paraguay 4,6 9,5 7,6 7,1 Peru 4,3 6,1 5,0 10,3 Uruguay 7,2 16,8 10,8 8,0 Venezuela 2,3 2,5 4,7 9,0 2000 23,8 61,8 17,1 61,1 13,1 17,0 44,4 15,0 18,1 23,6 35,8 58,3 17,2 20,8 10,4 29,3 2005 30,4 47,1 25,4 64,6 30,0 25,8 43,5 24,7 17,0 31,5 49,1 64,8 16,0 20,2 17,3 34,8 Source: Own elaboration based on UNCTAD Data In terms of trade, the Latin America remains competitive in the sectors where it is favored by resource endowments – thus, Ricardo’s comparative advantage approach still explains most of the regions export specialization. Natural resource-based exports remain the most important source of foreign exchange for most countries in the region. Furthermore, the region’s historical reliance on natural resources enlarged in the 90s, following the abandonment of the ISI model and the embracement of the neoliberal policies – i.e. stressing the importance of deregulation, privatization and of opening the economy [both current and capital account] and to reverse previous industrial policies. Industrial policies were portrayed as highly problematic, generating inflation and fiscal deficits as well as trade distortions. Following this loss of legitimacy, most countries introduced new trade policies, and previous integration experiences were dismantled5. Consequently, intra-trade flows remained at very low levels – with some exceptions at firm level, or regarding some specific industries (as the case of the automotive industry 5 The new experiences followed a different path, a sort of “open regionalism”. 7 in MERCOSUR)6. In contrast, intra-trade has been growing persistently in recent years among Asian countries (Urata, 2008). Among selected Asian countries, China became the main receptor of FDI – attracting US$ 70 billion in a single year (2005), an accumulating US$ 622.3 billion during the period 1986-2005. China’s opening of the economy was symbolized by the Chinese-Foreign Joint Venture Law of 1 July 1979. However, foreign investors were only allowed to enter in some “special economic zones” (mostly on the southern coast region), and only those aimed at exports7. The Chinese from Hong Kong and Taiwan were those who took advantage of this policy8. At the beginning of the 1990s, China intensified the opening program, allowing foreign investors to serve the internal market in those cases where China might profit from technology transfers. Henceforth, FDI was allowed in certain sectors, including telecommunications, transportation, banking and insurance. To sum up, since the economic reform was initiated in 1978, China has become the largest recipient of FDI among the developing world and globally the second only next to the US since the mid nineties. In second place comes Singapore, who received US$ 128 billion in the same period. [South] Korea began to receive increasing FDI flows in the aftermath of the 1997 crisis – when it abandoned its previous resistance against foreign investors9. Finally, it might also be worth mentioning the case of Vietnam. Since the beginning of the transformation process in the late 1980s (following the Do Moi reforms) FDI inflows totalized US$ 20.3 billion (1988-2005), outperforming other much larger Asian economies (Leproux and Brooks, 2004). With no important FDI inflows India has become the main exception to this trend of FDI in fast growing Asian countries. FDI was basically attracted by the industry sector, in order to supply both the internal and external markets. As an example, 60% of inward FDI coming to China was directed towards the manufacturing industry, while agriculture received less than 2% whereas inflows going to finance and insurance industries accounted for less than 1% (Fan Gang, 2003). As a whole, most incoming FDI in Asia has been vertical, that is, 6 The shares of intra-regional exports on total exports grow a mere 3% in the last 20 years – being at 13,1% in 2005 (Sauvent, 2007). 7 Some authors went further, highlighting that the government give SOEs preferential treatment over foreign and domestic private firms (Zhu, 2007). 8 The industry profited from foreign exchange control and exchange rates subsidies. 9 A similar fear impregnated Taiwanese policy makers (Wade, 1990) 8 associated with production networks and supply chain networks organized to minimize costs. From a time span perspective, industries are moving from the more developed to the less developed countries in Asia with FDI playing a critical role in the searching of productive efficiency (or efficiency – seeking industrial restructuring FDI), which responds to the “flying geese” hypothesis. Henceforth, the formation of regional production networks by multinational corporations (MNCs) intensified the linkage between FDI and foreign trade. A mounting web of preferential trade agreements also helped to promote the interest of investor, along the reduction in exchange rate uncertainty (Kim and Oh, 2007). Consequently, trade within production networks has become the distinctive mark of the investment in the region: trade and FDI flows move in parallel (Urata, 2001; Gill and Kharas, 2007). Henceforth, in contrast to Latin American, an important part of the flows arriving at Asian countries comes from within the region. Globally, the leading investors are coming from Hong Kong SAR, followed by Singapore, Taiwan POC, Korea Republic, and Malaysia (Hattari and Rajan, 2008). In the case of China, funds came from Hong Kong (China) and Taiwan (China), but also from wealthy expatriates living in the region (K.H. Zhang, 2002). Japan classifies as the main investor in Thailand (Siamwalla et. al., 1999), and Philippines (Balboa and Medalla, 2006). Singapore and Taiwan are among the main investors in Vietnam, Malaysians in Cambodia whereas Thais are in Laos PDR. (Leproux and Brooks, 2004; Bihn and Haughton, 2002). However, EU and US investors are also important in the region (Urata, 2008). US investments explain a high FDI share in quite a few of the analyzed countries (Philippines, India, Thailand and Singapore) and are investing vast amounts in others –e.g. China (Yingqui Wei, 2003). European are leading investors in Malaysia and Singapore (Urata, 2008). Anyway, taking into account that most FDI originates in industrial countries, it is striking that the majority of funds arriving in Asia originated within the region. What is more, and surprising at least from a Latin American perspective, much more FDI now originates within the region than was the case prior to the crisis. FDI flows within East Asia have increased since the financial crisis. The participation of foreign investors in the economy is also on the rise among Asian countries. Furthermore, in one country (Singapore) FDI even surpasses the GNP (national product). Their presence is also remarkable in Vietnam, encompassing a share above 60% of the GDP. However, more impressive is their small role in the region’s 9 biggest economies. Notably, and despite the open policy introduced since the early 80s, FDI stock in China remains at very low levels and decreased since the mid nineties10. In the cases of Korea, Taiwan and India, foreign investors´ share is also modest, but increasing in recent years since these countries embraced more open FDI policies. Table 2: FDI Stocks as a percentage of GDP – Asia Asian Countries Cambodia China India Indonesia Korea, Republic Lao RDR Malaysia Myanmar Philippines Singapore Taiwan, Province of China Thailand Vietnam 1980 2,4 3,1 0,6 13,2 2,1 0,3 20,7 12,7 3,9 52,9 5,8 3,0 0,2 1985 2,0 3,4 0,5 28,2 2,3 n.a. 23,3 11,3 8,5 73,6 4,7 5,1 1,1 1990 3,4 7,0 0,5 34,0 2,3 1,5 23,4 11,1 7,4 77,9 6,1 9,6 4,0 1995 12,1 19,6 1,6 25,0 2,0 11,6 32,3 17,2 8,2 71,5 5,9 10,4 28,5 2000 43,8 17,9 3,8 16,5 7,3 32,1 58,4 54,8 16,9 12,7 5,7 24,4 66,1 2005 45,6 14,3 5,8 7,7 8,0 24,5 36,5 43,6 2,1 158,6 12,1 33,5 61,2 Source: UNCTAD Data Finally, the region’s integration process can be seen in terms of trade. Actually, intra-regional exports accounts for more than half of the total exports made by Asian countries (Sauvant, 2007), as a consequence of the presence of vertical production chains as well as resulting from the emergence of regional distribution networks. As a result, the trade pattern is no longer one-way and based on international differences in resource endowments. What is more, intra-trade growth is expected to continue as well as the regional economic integration process. 10 FDI stock began to show down after the Chinese government introduced a set of fiscal policies coupled by increasing infrastructure works that induced locally founded new investments. Consequently, foreign investors were outperformed by local ones, increasing its contribution to fixed – asset investment (Fan Gang, 2003) 10 3. Investment Treaties Analysis The analysis focuses on the bilateral treaties signed by 28 different countries from Latin America (15) and Asia (13)11. The group accounts for almost 1.000 BITs signed, reduced to 704 after sorting out those [treaties] not approved. In the end, as a result of this research, 598 bilateral treaties were analyzed, 252 of them from Latin America and the rest originated in Asia12. The signature of bilateral agreements became a policy widely followed by almost all Latin American countries during the nineties. Argentina soon became one of the most fervent advocates of the bilateral scheme, signing more than 50 BITs and joining the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). Chile was another leading country in the adoption of the bilateral scheme in the past decade. However, the pace slowed in Latin America at the turn of the century13. Those Asian countries considered in this proposal were also very active in adopting this new scheme during the past decade and continue to use it thereafter. At an individual level, with an astonishing 112 BITs signed since the mid-eighties, China became the most active country in pursuing such a policy. But, also Korea (77), Malaysia (65), India (57) and Indonesia (57) demonstrated to be highly dynamic in this field14. 11 Treaties’ information was obtained from the UNCTAD BIT database. For the reason that information was not available, Myanmar was not included in the analysis. Only treaties signed and approved before January 1st 2005 will be considered in the analysis. Therefore, Brazil and Colombia were left aside. 12 In order to avoid duplication, whenever BIT partners come from both regions, the BIT is associated only to one region (Latin America or Asia). Consequently, only 145 BITs are counting in the database. 13 However, by the same time, numerous countries signed free trade agreements (FTA) with the U.S, either on a national (Chile, Colombia, Panama, and Peru) or regional basis as the case of Central American countries (CAFTA + Dominican Republic, including Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). The US currently negotiates similar free trade agreements with Ecuador and Uruguay. According to various observers, the investment rules introduced by this new scheme are even more stringent than former BITs. 14 Singapore and Thailand have also completed a FTA with the U.S. 11 Table 3: BITs signed by region BITs Asia* LA** Total BITs signed btw Asia & LA countries Signed 583 391 974 In force 430 274 704 Analyzed 345 253 598 Signed before 90s 68 15 83 Signed during 90s 293 240 533 Signed after 90s 69 30 99 Source: own elaboration based on UNCTAD BIT Database 290 145 Total Net 829 Analysed BITs / Total Net 72,14% Notes: Latin America: Argentina, Bolivia, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua, Panama, Paraguay, Peru, Uruguay, and, Venezuela. Asia: Cambodia, China, India, Indonesia, Korea (republic of), Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Taiwan (province of China), Thailand and Vietnam. As could easily be observed from the above table, the vast majority of treaties were signed in the 1990s (533), although Asian countries continued with the use of this scheme in the present decade (69 new BITs were signed). By contrast, enthusiasm seems to be vanishing among Latin American countries (only 27 BITs were introduced after 2000). Graph 1: BITs signed by Latin America & Asian countries Source: own elaboration from UNCTAD Database One of the main objectives followed by the treaties is investment promotion that could be attained by the introduction of a stable legal environment and simple rules. 12 Typically, a BIT first clause includes the definition of investment and investors. Next, most agreements include a series of clauses dealing with provisions designed to grant absolute (“fair and equitable treatment” clause) and relative (“Most Favored Nation” and “National Treatment” clauses) standards of treatment to foreign investors. After that, most treaties include a series of clauses defining expropriation. A final clause introduces the dispute settlement scheme, which could either be state to state or investor to state. In general terms, there are not so many exceptions - particular clauses present in some contracts but not in all of them. In this sense, most of the clauses followed a similar structure, beyond partners and regions. However, when looking at the particular BITs more in detail the picture changes. It should also be kept in mind that there was a local legal framework for FDI (Parra, 1996). In general terms the new framework put pressure on developing countries to augment FDI protection. But also new legislation was introduced in order to extend liberalization. Although market friendly policies expanded worldwide, some countries transformed their laws less than others. In this sense, most Asian countries maintained very restrictive regulations towards foreign investors during the period considered. To some extent, this is still the case in China, India, Indonesia, Philippines, Taiwan (Province of China), and Vietnam (APEC, 2003). By contrast, FDI regulations were relaxed in (South) Korea, but at the aftermath of the crisis. In what follows, the study introduces a general and particular analysis. Firstly, the BITs clauses are assessed individually as separate dependent variables. Secondly, the analysis goes to the particular clause. 3.1 General clauses in BITs: is there any difference? In order to analyze BIT differences, clauses were scrutinized for almost six hundred treaties, including: definition of investor and investment; investor’s treatment and protection; expropriation and compensation clauses; transfer conditions; and those related to the dispute settlement scheme. For instance, in terms of investor’s treatment and protection we considered whether each specific agreement granted: a) fair and equitable treatment; b) MFN treatment; c) national treatment; d) some exceptions to the above clauses (for instance, because the presence of customs unions or free trade agreements); e) Other exceptions to the MFN and NT clauses. 13 a) Investment definition [Idefinition 590 x 9] The definition of investment is among the key elements determining the scope of the application of rights and obligations under international investment agreements. The definition may also be central to the jurisdiction of the tribunals established pursuant to investment agreement since the scope of application (rationae materiae) may depend on the definition of investment. However, there is no single definition of what constitutes foreign investment. According to UNCTAD’s definition and following common practice, the analysis identified the following items: o Movable and immovable property, which covers tangible property. Some BITs enumerate other property rights such as mortgages, liens, pledges, usufructs and similar right o Shares, stock and other kind of participation in companies o Claims to money or to any other performance having a financial value, which suggests that investment includes not only property but also certain contractual rights. o Intellectual Property Rights, which may include trademarks, patents, copyrights, goodwill, technical processes, and, know how o Business concessions under public law, including concessions to search for, cultivate, extract or exploit natural resources. Also, rights to engage in economic and commercial activities conferred by law and by virtue of a contract. o Re-invested funds o Goods that, under a leasing contract, are place at the disposal of a lessee o Activities associated with investments, such as the organization and operation of business facilities, the acquisition, exercise and disposition of property rights including IPR / IPR such as copyrights, trademarks, patents, and industrial designs o No specific list 14 Table 4: BITs - Most common investment definition Concept Frequency Percent a) Movable and immovable property 579 98,14 % b) Shares 579 98,14 % c) Claims to money 579 98,14 % d) Intellectual Property Rights 557 94,41 % e) Business concessions under public law 573 97,12 % f) Re-invested funds 25 4,24 % g) Goods under a leasing contract 19 3,22 % h) Other activities associated with investments 24 4,07 % Notes: figures relates to the presence of the attribute (value equal to 1) Henceforth, for the investment definition the above table suggests the presence of a common pattern. b) Investment treatment and protection Most Favored Standard (MFN) means that a host country must extend to investors from one foreign country the same treatment it accords to investors from any other foreign country in like circumstances. Thus, the foreign investor can take advantage of the highest standard of treatment provided to a country in any BIT to which the host country is a party. It potentially applies to all kinds of investments, although some exceptions are common place – as those related to free trade areas, or custom unions. The vast majority of BITs do not include binding provisions concerning the admission of foreign investment, meaning that the MFN clause applies only to the postentry phase15. Table 5: BITs – Investment Treatment & Protection Concept a) Fair & Equitable Treatment b) MFN c) NT d) Exceptions (Customs Union, FTAs, others) e) Other Exceptions Frequency Percent 581 98,4 % 583 98,7 % 410 67.9 % 41 92.6 % 7 1.3 % A special mention deserves the National Treatment clause. By virtue of this clause, foreign investors are given the same treatment as domestic ones, so wiping away the foundation of infant industry protection. Surprisingly, on a detailed look it appears that an important share of BITs is not granting this type of treatment (32%), whereas almost all of them confer MFN treatment to foreign investors (98,7%). 15 In contrast, a number of new agreements (particularly, those initiated by the US and Canada) began to expand the MFN clause to the pre-entry phase 15 c) Expropriation [Edefinition590 x 3] The expropriation of property by Government can result from legislative or administrative acts that transfer title and physical possession (also known as direct taking). But governments can also take property by other “indirect” means. However, this last remains very difficult to distinguish, rising the moral hazard in both investors and host states16. Most BITs recognize the first type of expropriation, whereas the second is present just in few. Once the expropriation has been [approved] and made, it time to compensate the investor. Capital exporting states usually take the position that the Hull standard of prompt, adequate and effective compensation should be met. This requires the payment of full market value as compensation, speedily and in convertible currency. Some developing countries have taken the position that the payment of “appropriate compensation” would be sufficient. Nevertheless, recently the use of Hull formula has received increasing support – as showed by the BITs included in the sample17. Accordingly, BITs expropriation clause might be acknowledged by the presence of the following three clauses: a) For a public purpose on a non-discriminatory basis in accordance with the law and against compensation / fair and equitable compensation b) Compensation - real value, including interests. Without delay & freely transferable; c) indirect expropriation Table 6: BITs - Expropriation Concept Frequency Percent a) For a public purpose 588 99,7 % b) Compensation – Real Value & Without delay 588 99,7 % c) Indirect expropriation 22 67.9 % A related clause relates to reimbursement. The analysis listed 7 different items usually included plus one option for those treaties not introducing any sort of list. Among the items, the most commonly included are: 16 There are plenty of cases of foreign investors showing this kind of behaviour at NAFTA. But, also the Argentina crisis gives rise to some opportunistic trends (Stanley, 2004). 17 China might qualify as an exception. Among the several treaties signed, it included a variety of standards on compensation. For instance, with Australia (1988) it includes the Hull formulation, whereas with France (1984) it refers to the appropriate compensation. 16 Table 7: BITs – Reimbursement clauses Concept a) Initial capital and additional amounts to maintain or increase an investment b) Returns, interest, dividends and other current incomes c) Funds in repayment of loans d) Proceeds from total or partial liquidation of investment e) Payment for compensation / expropriation f) Payments arising out of the settlement of an investment dispute g) Earnings of nationals of the other Contracting Party who works in connection with an investment in the territory of the one Contracting Party h) Royalties, fees Frequency Percent 342 57.1 525 88.9 519 87.1 513 86.9 322 56.7 56 9.5 419 71.1 289 48.9 Notes: figures relate to the presence of the attribute (value equal to 1) d) Dispute Settlement Among the array of new rules and commitments, the new scheme introduced a new international system of dispute settlement that allowed investors to directly sue host states18. This became the real innovation, not only by recognizing rights to foreign investors but by agreeing to give them a forum where to redress alleged wrongs. Dispute resolution is a standard part of almost all BIT treaties and a key factor at the investor’s decisional matrix. This helps to explain why, for a vast majority of legal scholars, establishing a DS scheme became BITs´ essential purpose. But, while some treaties permit parties either to litigate their BIT claims before national courts or arbitral tribunals, other limit the acceptable dispute resolution mechanisms to arbitral tribunals. Moreover, some BITs require the exclusive use of national procedures and remedies, others require the prior exhaustion of domestic remedies in the host country before recourse to international dispute settlement systems, and there are some that allow foreign investors to direct their claims at international arbitral courts from the outset. In order to evaluate these differences, a DS tree was constructed for each country in the sample. The vast majority of DS provisions in BITs began with a clause (1st node) specifying that partners (investors and home country) might first negotiate amicably amongst them. Next, if dispute cannot be settled the DS game could either continue at local courts or international [arbitral] tribunals, without delay or after a certain period (3 or more months). In all cases, the second node could be solved cooperatively (following the agreement between the investor and the host country) or according to investor’s 18 In the past, foreign investor’s actions were limited either to sue the local government at the domestic courts, or to ask their home government to negotiate diplomatically on their behalf. 17 selection. To some extent, the first alternative replicates a “soft-Calvo” doctrine, in the sense that disputes should be settled firstly before national courts. Once this alternative is explored, foreign investors are set free to use some type of international DS mechanism. But, some countries (notably Indonesia) only allow investors to go until international bodies after exhausting the national alternatives. Finally, a few BITs (basically, older ones) also include a diplomatic solution. Under the second alternative, foreign investors are entitled to directly set its disputes with the host country before international fora. Although local courts might be accepted, investors could opt between that option and the different arbitral alternatives at hand [ICSID, ICSID AF, Ad-Hoc UNCITRAL, ICC, etc.). Alternatively, some treaties accord investors a direct access to a DS scheme. This alternative may be classified as investor – friendly. A more detailed analysis is included at the annex (after introducing two graphs), where it differentiates each principal node (2 and 3) according at the time the claim could be settled at courts. In the case both parties can initiate the dispute, timetable is as follows: a) without delay; b) After 3 months; c) After 6 months; d) After 9 months; e) After 12 months; and, f) After 18 months. In case investors are the single entitled to initiate the dispute, timetable is as follows: a) Without delay; b) After 3 months; c) After 4 months; d) After 5 months; e) After 6 months; f) After 9 months; g) After 12 months; and, h) After 18 months. In both cases, an array of tribunals is present, including: local courts, ICSID, ICSID AF, Ad-Hoc UNCITRAL; and, other Ad-Hoc Tribunals + ICC. As a consequence of the above differentiation, countries in Latin America are more open to international courts. In contrast, most Asian countries might be less enthusiastic. e) Duration Most of the BITs included in the analysis shows a 10 years period, with or without an automatic renewal for a similar period at the expiration date. However, some treaties signed to last perpetually (30 BITs). 18 Table 8: BITs - Duration Duration (years) 5 10 15 20 30 100 (indefinite) Total Frequency 23 427 101 19 2 12 584 Percent 3.94 73.12 17.29 3.25 0.34 2.05 100.00 Cumulative 3.94 77.05 94.35 97.60 97.95 100.00 3.2 BITs particular clauses or where the differences lie a) Investment definition On the one hand, one of the few exceptions to the MFN clause at Argentina’s BITs relates to the treatment promised to those investors coming under the special agreement signed with Spain and Italy. Therefore, instead of preserving some policy space, the asymmetries granted by Argentina to foreign investors merely introduced some privilege for one group over another. But also Argentina stand outs as being one of the few countries to recognize portfolio investment among the items qualifying as “investment” – after its introduction in the BIT signed with the US, and Bonds after those signed with Germany and Italy. On the other hand, one of the few exemption introduced by Chile relates to the capital movement safeguard imposed in the 1990s by the government in order to prevent short term movements in the capital account (1 year wall). Consequently, Chilean BITs only recognize investment promotion and protection for those investors staying longer. b) Investment treatment and protection plus bilateral treaty scope – A sign of distinction coming from Latin America & Asia plus Indonesia’s investment law. There are several ways in which restrictions could be introduced in the agreement. In some cases, restrictions are just introduced in the scope clause. For instance, all Indonesia BITs state that investment has to be previously admitted by the government – in accordance with Foreign Investment Law N° 1/1967. For example, at 19 the Indonesia- Malaysia BIT (Article X - Applicability for this Agreement), the parts agree that “ this agreement shall apply to investment by investors of Malaysia in the territory of the Republic of Indonesia which have been previously granted admission in accordance with the Law N° 1 of 1967 concerning Foreign Investment and any law amending or replacing it”. Similarly, at the Australia – Indonesia BIT (Article III – Scope of the Agreement), the parts agree that “Investments by investors of Australia in the territory of the Republic of Indonesia which have been granted admission in accordance with the Law N° 1 of 1967 concerning Foreign Investment or with any law amending or replacing it”. In other cases, the agreement recognizes the requirement to pursue some approval procedure. In the article 2 of the China - Thailand BIT " The benefits of this Agreement shall apply only in cases where investments of the nationals and companies of one Contracting Party in the territory of the other Contracting Party have been specifically approved in writing by the competent authority of the latter Contracting Party". Furthermore, in the annex of the BIT agreement with Belgium-Luxembourg it states that “Investment projects which may be approved by the Committee [Thailand], are those which have the following characteristics: a) investment using mainly local contents, b) Import substitution, c) labor intensive; d) export oriented, e) promoted investment such as pharmaceuticals, electronics, telecommunications, etc.; f) transfer of know-how and technology to Thai nationals”. Also restrictions may relate to foreign ownership participation, in the form of a threshold level – which varies for each specific industry. As an example, most of India’s BITs define companies as meaning "any corporation, firms and associations incorporated or constituted under the law in force in the territory of either Contracting Party, or in a third country if at least 51% of the equity interest is owned by investors of that Contracting Party, or in which investors of that Contracting Party control at least 51% of the voting rights in respect to shares owned by them". But, also in some BITs signed by Korea specifically mention the possibility of asymmetric treatment among investors [local and foreign] if that was previously recognized by law. As for example, at the article 10 of the Korea – Pakistan BIT “The provisions of this agreement are subject to the laws and regulations of each Contracting Party in regard to foreign investment and to any distinction that these laws and 20 regulations provide between the local investors of one Contracting Party and the investors of the other Contracting Party having investments in the territory of the former Contracting Party”. Similarly, in Thailand – Korea BIT states that exceptions could be admitted when “[granted] to a particular person or company of the status of a "promoted person" under the laws of Thailand on the promotion of investment” (article 8, numeral d). As in the BIT signed with Australia, it is stated: “For the purposes of this Agreement, a company is regarded as being controlled by a company or by a natural person. If that company or natural person has the ability to exercise decisive influence over the management and operation of the first mentioned company, specifically demonstrated by way of: (i) ownership of 51% of the shares or voting rights of the first mentioned company, or (ii) the ability to exercise decisive control over the selection of the majority of members of the board of directors of the first mentioned company.” In Australia – China BIT, the agreement states that “a) Each contracting party shall encourage and promote investment in its territory by national of the other CP and shall, in accordance with its law and investment policies applicable from time to time, admit investments, 2) Each CP reserves the right to refuse to admit the investment of any company of the other CP if nationals of any third country control such company, or if has no substantial business activities in the territory of the other CP, 3) this agreement shall no affect the right of a CP to allow or prohibit the making of investment within its territory by nationals of a third country. Sometimes, the majority of shares are required in order to settle a dispute before international courts. As an example, Malaysian bilateral agreements with Kazakhstan, Kyrgyz, Mongolia, Norway, Peru, Spain, UAE and UK "A company which is incorporated or constituted under the laws in force in the territory of one CP and in which before such a dispute arises the majority of shares are owned by investors of the other CP shall in accordance with Article 25.2.b of the (ICSID) Convention be treated for the purpose of this Convention as a company of the other CP". Exceptions are also present among Latin American countries. Surprisingly, Chile came out as one of the leading examples: its mining sector is almost closed to foreign 21 investors, in such a way that any activities related to this sector are subjected to a Presidential Decree.19 Finally, in various BITs signed by former communist countries declare the protection [to investors] after some date in the past (i.e.: after the collapse of the regime)20. c) Expropriation Recent BITs signed by US include the indirect expropriation (or takings) clause. d) Dispute Settlement – The China exemption China was very prudent when drafting the dispute settlement (DS) clauses in their BITs, as the evidence suggest. Early BITs signed by China required that all substantive claims were required to resolve before national courts21. Recourse to international arbitration was only available where the dispute concerned the amount of compensation to be paid for expropriation after conditions precedent as to negotiation and resort to local remedies has been satisfied. In other words, only after the local authority had determined the existence of an expropriation could the foreign investor initiate arbitration under the relevant BIT to determine the amount of compensation. This could help explain why the country has no cases before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) or other international arbitration bodies - although they hosted a large amount of FDI inflows. Surprisingly, reliance on national courts systems and limited access to arbitration has not stopped investors from making substantial investment in China – suggesting that investors are keen to gain a place in a developing market. 19 See, for example, Chile-Brazil BIT, where it declares that: “de acuerdo con lo dispuesto en el artículo 19 Nº 24 de la Constitución Política de la República y los artículos 7º y 8º del Código de Minería, la exploración y explotación de los hidrocarburos, líquidos y gaseosos, sólo se puede ejecutar directamente por el Estado o por sus empresas, o por medio de concesiones administrativas o de contratos especiales de operación, con los requisitos y bajos las condiciones que el Presidente fije para cada caso, por Decreto Supremo". 20 In the present analysis, the exception goes in hand to those countries belonging to the Asia group (China and Vietnam), comprising also those countries that became independent along the decolonization process (Indonesia) 21 See Agreement between the Government of the People’s Republic of China and Government of the Kingdom of Denmark Concerning the Encouragement and Reciprocal Protection of Investment (December 1986) art. 8, providing that if a dispute is not settled by negotiation, the dispute shall be “submitted to the competent court of the Contracting Party accepting the investment but permitting the amount of compensation resulting from expropriation to be determined through international arbitration (available at http://www.unctad.org/sections/dite/iia/docs/bits/china_denmark) 22 However, and despite its attitude towards incoming investors, a China originated investment in Peru initiated a claim recently. To some extent that might be in line with China recent move towards international standards, after a new [second generation] BITs consented to the unconditional submission to international arbitration of all disputes between investors and a contracting state (Rooney, 2007). The first to include such a clause was the treaty between China and Botswana. A similar statement could be found in the Korea – Russia BIT, allowing investors to claim before the UNCITRAL tribunals just in case of disagreement over expropriation or reimbursement22. 22 The agreement made at Moscow (December 14, 1990), become signed by the government of former USSR. 23 4. Some [preliminary] conclusions There is a growing concern about the effects exerted by globalization on developing countries. For those with a critical vision, the effects are poorly beneficial. The vision becomes more pessimistic when considering the effects introduced by the new global rules. Certainly, the new institutional architecture introduced during the past few years has diminished the policy space for development. But, to make those new rules account for wrongdoing at the local level is incorrect. International rules are highly important and necessary. Moreover, development economists have long recognized the importance of institutions in order to provide incentives for growth and development. Unfortunately, this vision was largely rejected until recently by the mainstream, and also by quite a few developing countries. For the former, institutions began to be recognized only after the structural adjustment failed (Meier, 2001). In view of the fact that then a “one-size-fits-all” approach prevailed (Rodrik, 2004). In the process of transformation involving the departure from the industrialist and highly bureaucratic development model, most countries in Latin America gave a welcome recognition to this new market oriented approach. Henceforth, a new approach emerged among them, accepting this new institutional scheme as a panacea. The above reflects one vision of foreign investment, in terms of external financing from a balance of payments perspective. This view tends to promote foreign investment aiming at a large volume of inflows, taking a “the more the better” point of view. The underlying idea is that the mere presence of foreign investment produces benefits that favor national growth and development. The danger here is that host governments limit their foreign investment policy to opening the economy, liberalizing, privatizing and deregulating, as measures to attract foreign investment. However, as usual there is also an alternative vision. This other view focuses primarily on foreign direct investment from a strategic perspective, as the Asian experience highlights. This emphasizes the quality of investment flows, in particular, as regards impacts, such as the transfer and assimilation of foreign technology, the training of national human resources, the construction of local production linkages, and national 24 enterprise development. It generally assumes that the benefits are not automatic and specialized polices are required to obtain them. This gradual approach conducted later to promote outward FDI, firstly on a regional basis, later globally. Both perspectives can result in success or failure; however, the successful cases usually define national development priorities and the role of foreign investment in obtaining them. Therefore, some lessons could be derived regarding institutions and FDI. The presence of a different pattern in the BITs signed by Latin American and Asian countries might also be signaling a new Asian exception. Additionally, although most countries at Asia experienced important legal changes related to FDI treatment, legal amendments were less friendly towards investors compared to those introduced by Latin American. Paradoxically, neither BIT´s special pattern nor the maintaining of some special legal arrangement prevented Asian countries to profit from globalization; neither did it preclude multinational companies to enter the market. Furthermore, for some pundits, BITs showed a limited impact on Asia’s integration process (Sauvé, 2007), explaining perhaps the relatively immature institutional framework presented by these countries (Soesastro, 2005; Gill and Kharas, 2007). But, the above picture began to looks different. Nowadays, institutions are increasingly playing a new role into the Asian integration process – mainly by virtue of preferential trade agreements (PTAs) and free trade agreements (FTAs). Investors are now obtaining more concessions – most of them rejected under the BITs scheme signed in the 1990s (Kumar, 2007), but exceptions persist (Urata and Sasuya, 2007). The investment provisions included in the new Asian agreement schemes have tended to follow a progressive liberalization approach given the varying levels of development existing in the region. By way of general or particular exceptions, In other words, the Asian experience might be suggesting that the “rules of the game” continue to be shaped according to development needs and strategies: Gerschnekron (1962) central message still been alive, maintaining alive the precept that institutions are context-specific and the timing of transformation remains crucial. 25 To sum up, instead of asking if Asian countries could offer to Latin American ones any lesson on industrial policy, this research seeks answers or lessons regarding institutional design. In this sense, this study can also assist Latin American countries to devise new strategies when negotiating BITs, in order to recuperate policy space. For the time being, the main policy advice that Latin American countries should hear is that the challenge for developing countries is to find the right balance between the promises offered by BITs and the loss of policy autonomy that they entail (UNCTAD, 2003). 26 5. References APEC (2003). Guide to the Investment Regime of the APEC Member Economies. Asia – Pacific Economic Cooperation – APEC Committee on Trade and Investment. Fifth Edition. Balboa, J. and E. M. Medalla (2006). State of Trade and Investments in the Philippines. Philippine Institute for Development Studies – Discussion Paper Series, 2006-15. Gerschenkron, A. (1962). Economic backwardness in historical perspective: a book of essays. Cambridge: Harvard University Press. Gill, I. and H. Kharas (2007). An East Asian Renaissance: Ideas for Economic Growth. The International Bank for Reconstruction and Development / The World Bank. Hattari, R. and R. S. Rajan (2008). Trends and drivers of Bilateral FDI flows in developing Asia. Hong Kong Institute for Monetary Research, HKIMR Working Paper Nº 11/2008 IDRB (2005). Privatization in Latin America: Myths and Reality. A.Chong & F. López de Silanes (eds.) InterAmerican Development Bank – Stanford University Press. Kim, J.S. and Y. Oh (2007). Determinants of Intra-FDI inflows in East Asia: Does Regional Economic Integration Affect Intra-FDI?. Korea Institute for International Economic Policy – KIEP Working Paper 07-01. Kumar, N. (2007). Investment Provisions in Regional Trading Arrangements in Asia: Relevance, Emerging Trends, and Policy Implications. RIS Research and Information System for Developing Countries – RIS Discussion Paper 125. 27 Leproux, V. & D.H. Brooks (2004). Viet Nam: Foreign Direct Investment and Postcrisis Regional Integration. Asian Development Bank - ERD Working Paper N° 56. Meier, G. (2001). The Old Generation of Development Economists and the New. In G. Meier and J. Stiglitz Frontiers of Development Economics: The future in perspective. Oxford University Press. Moltke, K. von (2000). Investment Regime? Issues of Sustanaibility. IISD Document Oman, C. (2000). Policy Competition for Foreign Direct Investment: A Study of Competition among Governments to Attract FDI. Paris: OECD Development Centre. Parra, A.R. (1996). The scope of new investment laws and international instruments. ICSID Review – Foreign Investment Law Journal. Peterson, L. (2004). Bilateral Investment Treaties and Development Policy – Making. International Institute of Sustainable Development and the Swiss Agency for Development and Cooperation. Rodrik (2004). Industrial Policy for the Twenty-First Century. Centre for Economic Policy Research, Discussion Paper Nº 4767. London, November. Rooney, K. (2007). ICSID and BIT Arbitrations and China. Journal of International Arbitration 24 (6): 689-712. Sauvé, P. (2007). Investment Regulation through Trade Agreements: Lessons from Asia. Asia-Pacific Research and Training Network on Trade – Working Paper Series, Nº 49. Siamwalla, A; Y. Vajragupta and P. Vichyanond (1999). Foreign Capital Flows to Thailand: Determinants and Impacts. Thailand Development Research Institute, Working Paper – November. 28 Soesastro, H. (2005). Accelerating ASEAN Economic Integration: Moving Beyond AFTA. Paper prepared at the Second ASEAN Leadership Forum, Kuala Lampur, 17 March 2005. CSIS Working Paper Series WPE 091. UNCTAD (2005). Research Note: Recent developments in international investment agreements, New York and Geneva, 30 August ----------- (2003). FDI Policies for Development: National and International Perspectives – World Investment Report. New York and Geneva - United Nations ------------(1998). Bilateral Investment Treaties in the Mid-1990s. UNCTAD/ITE/ITT/7, New York, September. United Nations. ------------ (1996) Incentives and Foreign Direct Investment. New York – United Nations. UNDP (2005). Investment Provisions in Free Trade Agreements and Investment Treaties: Opportunities and Threats for Developing Countries. Asia-Pacific Trade and Investment Initiative Working Paper, UNDP Regional Centre in Colombo, December. Urata, S. (2001). Emergence of an FDI-Trade nexus and Economic Growth in East Asia. Chapter 11 at Joseph Stiglitz and Shahid Yusuf (editors) Rethinking the East Asian Miracle. The World Bank, ----------- (2008). An Economic Analysis of Competitive Regionalism in East Asia. Paper presented at the Symposium on “Competitive Regionalism: Strategic Dynamic of FTA negotiations in East Asia and Beyond” at Waseda University, Tokyo -Japan, May 30-31 2008. Urata, S. & J. Sasuya (2007). An Analysis of the Restrictions on Foreign Direct Investment in Free Trade Agreements. Paper prepared for RIETI Policy Symposium “Assessing Quality and Impacts of FTAs” held on March 22-23, Tokyo – Japan and published as RIETI Discussion Papers Series 07-E-018. 29 Wade, R. H. (1990). Governing the Market. Princeton: Princeton University Press. Zhu, T. (2007). Rethinking Import-Substitution Industrialization: Development Strategies and Institutions in Taiwan and China. Chapter 14 at “Institutional Change and Economic Development”, edited by Ha-Joo Chang. United Nations University Press and Anthem Press. 30 Annexes  Treaties analyzed Annex - Table 1: Latin America BITs Source: own elaboration Annex - Table 2: Asian BITs Source: Own elaboration 31