An international framework for disciplining outward FDI incentives could help address the potentially distortive effects of certain home-country measures that governments are increasingly employing to promote or support outward FDI activities. This Perspective highlights which factors should be considered to increase the feasibility of undertaking such a global compact approach.
An international framework for disciplining outward FDI incentives could help address the potentially distortive effects of certain home-country measures that governments are increasingly employing to promote or support outward FDI activities. This Perspective highlights which factors should be considered to increase the feasibility of undertaking such a global compact approach.
An E15 Initiative think piece: Investment incentives rank among the most important policy instruments governments employ to influence the locational decisions of multinational firms. In the wake of the recent increase in locational competition and the growing impact of investment incentives and support measures for state-owned enterprises (SOEs), the need for enhanced disciplines on investment incentives has gained political and academic salience. This think piece explores the evolution of investment incentives from a development and rule-making perspective. It summarises the existing literature and examines current practices and recent trends in FDI flows and the use of various investment incentives. This is followed by a discussion of the reasons for the observed stalemate in attempts at disciplinary rule-making. The paper concludes by putting forth recommendations for data gathering and transparency that could further the move toward improved global governance founded on the increasing complementarities of trade, investment, and competition law and policy as the core pillars of a more open, inclusive, and just world economy.
This paper explores the hitherto futile quest for developing disciplines on the trade- and investment-distorting effects of services subsidies. It sheds light on the multiplicity of factors that have weighed on the conduct of negotiations on subsidy disciplines in a services trade context at both the global and preferential levels, and advances a few thoughts on what the future may hold for the adoption of such disciplines. The analysis suggests that it is rather unlikely that WTO Members will any time soon reach a consensus on the matter of subsidy disciplines for services beyond those that currently (and timidly) obtain in the GATS and in many preferential trade agreements. The main reason behind such a conclusion stems from a marked rise in the value of preserving policy space in a trading environment characterized by considerably greater global market contestability than two decades ago.
