An International Investment Agreement (IIA) is a common breed of international treaties which is concluded between two or more than two countries binding them to each other in terms of co-operation pertaining to s protection, promotion and liberalization of inflows of investments. IIA’s are of course less stringent than trading blocs and economic co-operation groups but nevertheless they have a fair standing in shaping the trade policies and attitudes of any country that is a member. IIA’s have the potential of being very supportive for trade matters as they commit countries to stand-by and harmonize certain specific standards on the treatment of foreign investments within their area and ambit of operations/jurisdiction.
The area which is frequently covered by IIA’s is Foreign Direct Investment and the contents of an IIA will generally aim to set specific standards as to the treatment of foreign direct investments. IIA’s generally contain a dispute resolution procedure in the event a country refuses to acknowledge these commitments. IIAs can include Bilateral Investment Treaties (BITs) and Preferential Trade and Investment Agreements (PTIAs) as well as International Taxation Agreements and Double Taxation Treaties (DTTs). Therefore in the paper at hand we will be dealing with a variety of IIA species for discussion. BITs are significant too as they involve issues like the entry, treatment and protection of foreign investment coming from a partner or member country. PTIA’s are wider in nature, as in they have a group of member states who have stated that they will co-operate with each other in the future in terms of economics and trade. While foreign investment is one of their issues of interest there are many other points on which they agree to co-operate as well including trade policies. Also, double taxation is a matter of achieving better FDI and is often a subject of economic treaties.