The Relationship between FDI and Economic Sovereignty on Developing Countries with Reference to the Multilateral

Chun Hung Lin
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Chun Hung Lin: Graduate Institute of Financial and Economic Law, Feng Chia University, Taiwan

Journal of Economics and Management, 2006, vol. 2, issue 1, 93-110

Abstract: During the past few decades, foreign direct investment (FDI) has rapidly increased and has enhanced the world's economic growth. Although FDI has become one of the major driving forces of global economic development, related international investment legal instruments has not been adequately established yet. Under the new round of WTO negotiations, some industrialized countries have suggested drawing the OECD's proposed Multilateral Agreement on Investment (MAI) into the World Trade Organization (WTO) for future processes. Facing this new trend, many developing countries fear that their national and economic sovereignty may be compromised in future WTO negotiations. As a consequence, finding a balance between economic gains from FDI and economic sovereignty presents a challenge for developing countries. Is FDI a necessary mechanism for developing countries to promote their economic growth? The discussion directly addresses the MAI.

Keywords: foreign direct investment (FDI); Multilateral Agreement on Investment (MAI); multinational enterprises (MNEs); Organization for Economic Corporation and Development (OECD); World Trade Organization (WTO); developing economies (search for similar items in EconPapers)
Date: 2006
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