Despite the perceived need, a regulatory framework for government policy and foreign direct investment at the global level is still lacking. What exists today is a complex network of bilateral, regional and multilateral agreements that operates in an undr coordinated and limited manner. Most multilateral international agreements on foreign direct investment focus on the restrictions and requirements imposed on multinationals by national governments. In particular, they address trade barriers and performance requirements (TRIMs), which aim to capture spillovers and protect economies from negative influences from multinationals. Other agreements (bilateral and regional agreements) aim to protect international property and attract foreign direct investment. The debate over the international regulation of foreign direct investment and TRIMs began in the early 1980s, when protection policies and performance requirements were increasingly criticized by investors and multinationals for significantly distorting global trade and investment flows. Supported by the governments of developed countries (especially OECD countries), these critics sought to develop an international regulatory system that would achieve a “level playing field” in which foreign investors would receive the same treatment as domestic companies. At the same time, the growing belief that foreign direct investment has a significant positive impact on economies has strengthened the efforts of national governments to attract foreign direct investment. To avoid a “race to the bottom” in which no country would benefit, it was also argued that an international regulatory framework for foreign direct investment was needed. So far, such framework conditions have been developed in particular at the level of regional common markets such as the North American Free Trade Agreement, APEC, Mercosur and the EU Economic Area. Agreements generally aim to strengthen foreign direct investment flows by creating a secure multilateral economic policy environment and ensuring access to a larger market. Recent studies on the role of regional cooperation have shown that the level of foreign direct investment generally increases when countries join common markets.
These agreements are particularly advantageous for the United States because it already has low trade barriers when it comes to importing goods from other countries. In fact, the U.S. Department of Commerce reported that “U.S. exports of goods to current free trade agreement partners supported more than 3 million jobs in 2015, an increase of more than 22 percent since 2009.” Description of a framework agreement between Italy and Croatia The biggest disadvantage of multilateral agreements is that they are complex. This makes them difficult and takes a long time to negotiate. Sometimes the length of the negotiation means that it will not take place at all. The fifth advantage applies to emerging markets. Bilateral trade agreements tend to favour the country with the best economy. This puts the weaker nation at a disadvantage. But strengthening emerging markets helps the developed economy over time.
Multilateral agreements have been concluded and progress is being made in achieving common standards. They do not have as much impact on economic growth as a multilateral agreement. Especially with the North American Free Trade Agreement, there is a 300% increase in trade until 2009. It is clear that it is worth discussing the rules and regulations to ensure that these agreements continue. Directly related to this article is the provision of Article 11 in paragraphs 1 and 2, which allows Parties to act with non-Contracting Parties provided that bilateral and multilateral agreements or arrangements are concluded “containing provisions no less environmentally sound than those provided for in this Convention”. and “with the environmentally sound management of hazardous industries and other wastes in accordance with this Convention” if such agreements are concluded before their entry into force of the Basel Convention […].