ABSTRACT
This chapter focuses on three aspects of the investment liberalisation process. It provides a short overview of the substantial changes in trade and investment patterns that provided the conditions for a Multilateral Agreement on Investment (MAI) to be proposed. The chapter examines the balance of 'rights' of investors, in relation to host governments and societies, in terms of the provisions contained within the draft agreement itself and in terms of the risks associated with increasing levels of foreign ownership and cross border investment. The draft MAI makes provision for the rights of investors to be enforced through the use of state-to-state and investor-to-state dispute resolution mechanisms. Recent trends in the regulatory framework for investment clearly point to a reduction in restrictions on investment at the national, regional, inter-regional, bilateral and multilateral levels. According to liberal economists, there is a shortage of private capital, and so efforts should be made to minimise the risks for investors.
