The universe of international investment agreements (IIAs) consisted, as of end 2004, of over 2,350 bilateral investment treaties (BITs), over 2,500 double taxation treaties (DTTs), numerous bilateraland regional preferential trade and investment agreements (PTIAs) and various multilateral agreements. Over the past decade, the number of such agreements has risen substantially, and their geographical scopehas widened. The result is a multilayered and multifaceted network of international investment instruments, with agreements differing in regard to their geographical coverage, their scope and the content of their obligations and commitments. The structure of this network has been undergoing changes, most importantly with respect to the composition of IIA signatories. In particular, the past decade has seen a rise in IIAs between developing countries, pointing to a wave of South-South cooperation in investment.
This phenomenon is occurring as developing countries are increasingly becoming home countries for FDI flows and their companies start to figure more prominently amongst the world´s major transnational corporations (TNCs). In fact, the outward FDI stock of developing countries has grown considerably since 1990, with a particular leap since 1995. In addition, FDI flows originating from, and going to, developing countries appear to be growing faster than those from developed to developing countries since the late 1990s.
Thus, developing countries are currently part of a parallel growth trend of South-South FDI flows and of South-South investment agreements that may be mutually reinforcing: increasing FDI flows may provide an impetus to strengthen the protection of investment by means of IIAs, while IIAs, in turn, may play a role in promoting and facilitating investment flows.
This volume seeks to provide a brief overview over the emerging patterns of South-South IIAs.3 It first describes trends over time, with respect to the geographical coverage of South-South IIAs.Next, it analyzes salient features of South-South IIAs, in terms of their main objectives and content, as well as their development dimension. Finally, it raises issues related to further South-South cooperation in the investment context.
