Agreement between the EU and the US for creating stable, predictable and transparent investment regimes

Karel De Gucht, EU Trade Commissioner and Deputy Assistant to the President of the United States Michael Froman adopted a blueprint for open and stable investment climates. The principles included in this action plan cover the elements which the EU and the US believe are necessary to attract long-term sustainable investment.

The EU and the US have agreed in adopting a blueprint for creating and maintaining stable, predictable and transparent investment regimes, in the framework of the Transatlantic Economic Council (TEC). In April 2011, the EU and the US also agreed on a set of ten fundamental principles for trade in information and communication technology (ICT) services. The Statement on Shared Principles for International Investment urges governments to maintain open, transparent and non-discriminatory investment climates. At the same time it confirms that governments can commit to a high level of investment protection and still maintain the right to regulate in order to pursue legitimate public policy objectives, which include for the EU the environment, health, safety, labour or cultural diversity.

The ambitious set of investment principles have been signed by the EU Trade Commissioner Karel De Gucht and the Deputy Assistant to the President of the United States Michael Froman, and they openly invite other countries to follow suit. These principles also stresses that governments should not lower their standards, for example in relation to human rights or the environment, in order to attract foreign direct investment.

Transatlantic investment flows generate deep economic integration with significant intra-firm trade. For instance, half of all US foreign affiliates are in Europe and 60% of the assets held by US foreign affiliates are in Europe. The equivalent figure for EU affiliates in the US is 75%. Moreover, estimates suggest that intra-firm trade represents more than a third of the total transatlantic trade.