The flood tide of international investment protectionism needs to be urgently addressed by governments, says Guy Sebban
The International Chamber of Commerce (ICC) strongly believes that cross-border investment is essential to sustaining prosperity in developed and developing countries and that governments must avoid investment protectionism. 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 out of protectionist motivation. Some governments have clearly gone too far in recent years, including governments that have been represented at the recent G8 summit.
Despite the demonstrated benefits of foreign investment, world business is very troubled by this new tide of investment protectionism, i.e., deliberate actions or hints of actions by governments to deny or impede the flow of cross-border investment under the pretext of protecting 'strategic sectors' or 'preserving national security'. Surprisingly, those countries that have long promoted and benefited from foreign investment are now raising politically-motivated barriers to block foreign investment in sectors as varied as energy, financial services (including stock exchanges and banking), steel, food, tobacco, and ports.
A recent survey conducted by ICC and the Ifo Institute asked economists around the world about the rising tide of investment protectionism. In all regions, a majority of the respondents said they were very concerned about an upswing in international investment protectionism. Most said protectionism leads to erosion of national and global investment outlooks, increased costs and a decline in competitiveness.
Our goal is to work with governments and intergovernmental organizations to reverse the trend toward investment protectionism. ICC urges governments in developed and developing countries to turn away from investment protectionism and to welcome market-driven foreign investment.
