EU And US Issue First Ever Joint Statement On Open Investment

By Ulrika Lomas, for LawAndTax-News.com, Brussels

14 May 2008

The EU and the US used Tuesday's meeting of the Transatlantic Economic Council to adopt and issue their first ever joint statement on investment.

In the face of rising protectionist pressures, the world's two largest investors "have asserted the value of an open global investment climate", they announced.

The Joint Statement set out for the first time in a joint EU-US declaration the fundamental nature of these policies to their economic prosperity, and also affirmed the commitment of both parties to promoting open investment policies at home and abroad.

Additionally, the statement set out the line for further joint work, and will serve as a touchstone for future policies in this area.

EU Trade Commissioner, Peter Mandelson commented that:

"This is the moment for the EU and the US to send an unambiguous signal about our commitment to openness to foreign investment. Politicising foreign investment not only raises unfounded public fears, but it threatens a protectionist turn in global investment markets from which everyone could lose."

The joint statement, which largely underlines the benefits of international investment in terms of job creation, competitiveness and sustainable economic growth, and stresses the importance of non-discriminatory and clear policies on investment, is a result of the work of the EU-US Investment Dialogue, a cooperation forum in the area of investment set up at the first TEC meeting in November 2007.

In their statement, the EU and US explained:

"Today we jointly affirm our commitment to promoting open investment policies at home and abroad and acknowledge that these policies are fundamental to our prosperity. As the global investment environment evolves, with new roles for some actors and the challenges and opportunities that this brings, it is important that there be confidence both in the system and in the actors."

"We affirm that openness to investment serves as a touchstone for us as we set policies, address new challenges, and interact with our partners around the world."

"The benefits of international investment are clear. International investment spurs the development and introduction of new technologies and business methods and provides for healthy competition that fosters innovation. This investment brings to an economy jobs, expertise, increased productivity, and a wider range of goods and services at competitive prices," they continued, going on to add:

"An open economy, including an open international investment regime, is indispensable to fostering sustainable economic growth. Investment policies should be non-discriminatory and provide investors clear guidance on any investment restrictions. Countries should avoid new restrictions and strive to eliminate existing restrictions. These principles are cornerstones of our respective investment regimes, and we encourage others to commit to them too."

"We recognize our responsibility in resisting protectionist sentiment at home and in working together to oppose protectionism abroad. Barriers to international investment deprive the global economy and the economies of countries that erect those barriers of a vital source of economic growth."

"An open investment environment is compatible with policies that address genuine national security concerns. Measures that address national security concerns should be transparent, predictable and proportionate to the national security concern identified, and precisely circumscribed so as to avoid unduly disrupting the flow of investment," both sides agreed, further observing that:

"We note the growth of investments by government-controlled investors such as sovereign wealth funds. We welcome commercially-driven investment from these investors and note the importance of transparent investment policies."

"As two of the world’s largest sources and recipients of international investment, we are committed to promoting the free flow of investment and the critical role it plays in strengthening both the transatlantic and the world economy," they concluded.

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