The Making of Europe’s International Investment Policy: Uncertain First Steps

Abstract

The Treaty of Lisbon's grant of exclusive competence to the European Union for foreign direct investment (FDI) matters signals the beginning of a profound shift in the global landscape of FDI regulation as the international investment policies of twenty-seven states begin to be consolidated and harmonized at a regional level. The Union's first steps in developing its international investment policy, however, have been uncertain. The process thus far has lacked transparency and has been marked by significant disagreement in approach and substance among the European institutions. Among the EU's decision-making bodies there is disagreement over fundamental issues such as whether to develop a model investment treaty text and how to strike a balance between the protection of investors and the preservation of host state regulatory discretion. This article evaluates the key issues facing the European Union and places them within their international context.