Towards a comprehensive European international investment policy

The opinion is a referral to the policy paper "Towards a comprehensive European international investment policy", which explores how best investment policy can contribute to smart, sustainable and inclusive growth - the goals of the Europe 2020 Strategy published by the European Commission on 7 July 2010.

The Committee welcomes the new EU competence in FDI and the opportunities this first step brings for stronger, more consistent investment protection between member states and third countries. An overarching framework is welcome provided it is not too restrictive. It is essential that investor security is maintained, both in the interests of EU business and developing countries. The enhanced bargaining power of exclusive EU competence should result in the EU becoming a more important actor, and enable better access to key third country markets whilst protecting investors, thereby enhancing our international competitiveness.

The EU's trade and investment policy "has to fit with" and be consistent with economic and other policies of the Union, including "protection of the environment, decent work, health and safety at work" and Development. It is essential that EU investment policy must not cut across any of these. Equally, investors’ obligations towards sustainable development requirements need to be taken fully into account as they strive to underpin and maintain their overall competitiveness. Nevertheless an effective EU investment strategy has a crucial role to play in maintaining EU competitiveness at a time of rapid economic change and major shifts in relative economic power around the world.

The EU investment agreements should result in combining an open investment environment with effective protection for EU investors and ensuring operational flexibility in the countries in which they are investing. Such an environment is essential if investors are to benefit, with the progressive abolition of restrictions on investment, and sufficient protection notably by including provisions on national treatment, fair and equitable treatment and free transfer of funds.

Any attempt to terminate all existing Member State Bilateral Investment Treaties ("BITs") within five years would have a huge immediate destabilising effect on existing investments as well as on employment and social protection, although that should not preclude looking at these closely as part of any review to ensure a more coherent, transparent and balanced EU approach in the future.

The EU needs to take a critical look at recent developments in international investment law, as well as in investment policy and practice (including investor state arbitration), to ensure that its thinking and approach to future investment treaties and investment chapters in free trade agreements is both state of the art and sustainable.

The Committee urges the Commission to use Investment Protection Agreements as key opportunities to encourage the kind of long-term investment in developing countries that brings economic benefits such as high quality decent work, infrastructure improvements and knowledge transfer.

The European Commissions document does not sufficiently cover the interaction of EU international investment policy with the EU Development programme, with particular reference to ACP, least developed countries and the outstanding Economic Partnership Agreement (EPA) negotiations.

More attention should be also paid to possible takeovers of strategically sensitive European businesses and companies.

The inclusion of investment chapters must be sought wherever possible as part of any wider EU trade negotiations and that investment must equally be included in the monitoring role foreseen for civil society where Civil Society Fora are to be set up under such agreements.