ABSTRACT
This chapter examines how Regional Trade Agreements (RTA) can affect investment, in particular listing investment-related provisions that promote intra- and extra-regional foreign direct investment (FDI). It describes investment-related provisions by key region. The chapter provides a summary of new evidence on the effects of RTAs on FDI. It discusses what provisions have been implemented in the context of RTAs. The chapter shows that there is a wide variation in regional provisions across regions. The first major attempt to enhance regional investment cooperation was the 1987 Association of South-East Asian Nations (ASEAN) Agreement on the Promotion and Protection of Investment, the provisions of which were improved under a 1996 amending Protocol. The Agreement on the Promotion and Protection of Investment guaranteed ASEAN investors free transfer of funds across borders and protection from expropriation and nationalization. ASEAN’s dispute settlement mechanism has been effective, with at least one case put forward for arbitration.
