Brussels, 17/04/2012 (Agence Europe) - EU and US investment regimes will be governed by common principles. The EU and the United States reached agreement within the framework of the Transatlantic Economic Council on common principles for creating and maintaining stable, predictable and transparent investment regimes. The principles cover the elements, which the EU and the US believe are necessary to attract long-term sustainable investment.
The Statement on Shared Principles for International Investment was signed on 10 April by the co-president of the TEC, the European Commissioner for trade Karel De Gucht and Deputy Assistant to the President of the United States Michael Froman. It urges governments to maintain open, transparent and non-discriminatory investment climates and simultaneously, it confirms that governments can commit to a high level of investment protection and still maintain the right to regulate in order to pursue legitimate public policy objectives. In the view of the EU, such objectives include the environment, health, safety, labour or cultural diversity. The Statement, which is open to other countries, stresses that governments should not lower their standards, for example, in relation to human rights or the environment, in order to attract foreign direct investment, said the European Commission in a press statement. The text includes seven points: opening up of investment regimes, a level playing field, protection for investors and investments, fair and binding dispute settlement, transparency, responsible investment and national security considerations.
In a press release, the Commission says that, in the last 15 years, there has been a dramatic increase in capital movements, including notably of foreign direct investment (FDI). Both a cause and an effect of globalisation, FDI flows reached a record high of almost €1,500 billion in 2008 but experienced a significant fall in 2009. According to and the most recent figures of UNCTAD capital flows made up lost ground in 2011 (see EUROPE 10595). With €305 billion invested by European operators outside the EU in 2010 and € 6,700 billion in FDI assets abroad controlled by European investors (60% of its GDP), the EU is the main source of FDI at an international level. It is also the main destination for FDI, with that foreign investors investing €229 billion in 2010 and controlling almost € 5,250 billion in FDI assets in the EU.
The transatlantic commercial relationship is by far the largest in the world, with the United States and the European Union exceeding €3.22 trillion in annual trade, investment and sales by foreign affiliates of companies in one another's markets, representing over 50% of global GDP and 30% of global trade. Transatlantic investment flows generate deep economic integration with significant intra-firm trade. For instance, half of all US foreign affiliates are in Europe and 60% of the assets held by US foreign affiliates are in Europe. The equivalent figure for EU affiliates in the US is 75%. In 2010, capital flows from the EU to US reached €20.9 billion and those from the US to the EU, €44.9 billion. Investment stocks inward and outwards between the EU and US each amounted to €1.2 trillion in 2010. (EH/transl.fl)