ABSTRACT
In the absence of a multilateral investment agreement, 1 more states are inclined to negotiate an investment agreement under a bilateral or a free trade agreement (FTA) framework. Inclusion of an investment agreement in a FTA will arguably support the creation of a larger market (Hoekman and Newfarmer 2005: 949), which will offer an incentive for investment as it ensures greater demand for the investor's goods and services. Furthermore, the relaxation of trade barriers lowers the cost of importing capital resources eventually making the cost of investment more economical. Therefore, it is not surprising to find that states are increasingly including an Investment Chapter in their FTAs. In 2008, the OECD observed that 20 FTAs at the bilateral and regional levels incorporated an investment discipline in one of their FTA chapters (OECD 2008: 242).
