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The Greater Caribbean This Week

The importance of reciprocal investment protection

by Luis Noriega

The heads of state and/or government of the Association of Caribbean States (ACS), during the Panama Summit held in July of this year, recognized in its Declaration, “the importance of having a Framework Agreement for the Promotion and Reciprocal Protection of Investments among ACS Members, an instrument that will help to promote, protect and confer legal certainty on investments …”

In that regard, a mandate has been issued for an Investment Working Group to be formed and it must establish its own negotiating guidelines and commence the process, so that a framework agreement could be signed within the Association of Caribbean States.

With co-operation from the government of the United Mexican States, the ACS recently carried out one of the first activities in preparing the negotiations for the aforementioned Framework Agreement, specifically, the “ Training Seminar on Negotiating Investment Agreements in the Region of the Association of Caribbean States.” This seminar was designed to enhance knowledge on international investment protection agreements and allowed experiences and ideas to be shared and exchanged between the presenters and participants. The seminar has also provided the participants with the best negotiating tools for creating new generation agreements on investment promotion and protection.

The substantive part of the aforementioned seminar included definitions that outline the scope of an agreement of this nature and allow an understanding of levels of protection and legal certainty for investors through different disciplines and standards. The procedural part of the seminar covered the basic requirements of an international new generation agreement that extends beyond the scope of the agreements signed several years ago.

ACS members share grand expectations for this negotiation, since a multilateral agreement at this level would be the only of its kind in the world, but most of all, it represents a highly valuable instrument for the region. The current reality is that countries have mainly negotiated such agreements at the bilateral level and in some cases at the multilateral level.

Signing an agreement in the Greater Caribbean would allow consensus levels to be reached where minimum rules would be applied for all members of the Association of Caribbean States and legal certainty would, on one hand, help improve investment levels among countries and more specifically, investors can have mechanisms for settling differences with the states where investments are made, which significantly strengthens and improves economic relations among States. The range and definitions that form part of the rules of this type of agreement contain aspects pertaining to investment treatment and protection through National Treatment, Most Favored Nation Treatment, minimum standard treatment, expropriation and forms of compensation, exceptions, just to name a few.

For the Association of Caribbean States, the signing of a Framework Agreement for the Promotion and Reciprocal Protection of Investments is an instrument of great support for the mission entrusted to member states and associate members to promote, consolidate and strengthen the regional co-operation and integration process in the Caribbean in order to create an enhanced economic space that will help increase competitiveness in international markets and provide a timely and effective response to the challenges and opportunities presented by the globalization of the world economy.

 

Luis Noriega is the Director of Trade of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org

 

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