Foreign investment law and international trade law Coursework

Foreign investment law and international trade law - Coursework Example This research will begin with the statement that study of Foreign Investment and International Trade Laws requires a thorough analysis of the global trade scenario that involves cross-border trades in goods and services, capital mobility, expropriation of property rights in host countries, labor standards and mobility, International monetary stability, and economic development. The positive effects of International Trade and foreign investment on economic growth as first pointed out by Smith are becoming more delicate due to lack of or inefficient conflict resolution mechanism at International forum and poor adaptability and assimilation of International legal principles in legal frameworks of host countries. Today, with the increasing globalization of world economy, International trade and foreign direct investment have grown dramatically. This has made Foreign investment law and International trade law more important as the subject of study and as a viable solution to counter the n egative impacts of free trade regime. A successful implementation of International trade laws generally depends upon the Foreign Investment Laws of different countries, as in some instances different countries frame their foreign investment laws in such a way that is against the principle of International Trade Laws. Though the purpose of such protectionist foreign investment laws is often to protect local trade, it results in a closed economy and deprives countries of opportunities of better growth prospects.... Until very recently, most scholars have opined that FDI is likely to be directed to sectors characterized by one or more of three features: (i) capital and/or knowledge intensity, (ii) product differentiation and (iii) th provision of services which are supportive of othr kinds of FDI, are information intensive, or are "branded" in some way or anothr. For much of th post-war period, th growth of FDI has been concentrated in thse sectors - notably oil, autos, electronics nd electrical equipment, office machinery, pharmaceuticals, packaged foods, banking nd finance, business consultancies nd trade-related services; nd, indeed, until th late 1999s, th share of th global sales of multinational enterprises (MNEs) in thse sectors accounted for by thir foreign affiliates continued to rise. It is, thus, understandable that countries which display dynamic comparative advantage in those activities are those which have recorded th largest rise in their inbound FDI (Kuemmerle, 2006). 2.2 Significance of trade nd investment to world economic growth Over the past 5 years, there have been several significant changes in th geographical distribution of FDI, both within developed nd developing countries, nd between them. It is worth noting that there are some leading developed nd developing economies which did not receive as much FDI as one might have expected. Japan is the most obvious example; as Porter (2000), it accounted for only 0.6% inflows into th developed countries in 1975-80 and 1.0% in 2000-2004. Of th larger European countries, Italy received only one-quarter th share of France in both periods, while some of th more populated newly industrial countries of Asia like Korea, Taiwan nd th Philippines, attracted only modest (though increasing) amounts of new