ICC Document & publication

Governments must avoid investment protectionism

The International Chamber of Commerce (ICC) strongly believes that cross-border investment is essential to sustaining prosperity in developed and developing countries. While governments of all sovereign nations reserve the right to regulate, it is critical that they do so in a manner that does not discriminate against or impede foreign investment.

The positive contribution of foreign investment to economic growth, employment creation and raising living standards is broadly recognized by governments worldwide. Foreign investment and openness of markets to receive such investment have played an important role in the development of economies in many regions of the world.

Over the years the global economy has witnessed a sharp diminution in the barriers to foreign investment as governments have welcomed foreign investors to bring their capital, technology, and management expertise to generate economic growth and jobs. With the reduction of barriers, foreign direct investment flows trebled from some US$300 billion in the early 1990s to over US$900 billion in 2005. This sharp rise in investment contributed significantly to global economic growth, which doubled in dollar terms over the same period. While the geographic distribution of the investment has been widespread, Western Europe, the United States and China received the majority of this increase.

The International Chamber of Commerce (ICC) strongly believes that cross-border investment is essential to sustaining prosperity in developed and developing countries. While governments of all sovereign nations reserve the right to regulate, it is critical that they do so in a manner that does not discriminate against or impede foreign investment. Some governments have clearly gone too far. ICC deplores this trend and urges governments in developed and developing countries to avoid investment protectionism and to uphold their commitments in word and in practice to welcome market-driven foreign investment.