There is a symbiotic relationship between trade and investment. Countries which have been able to attract foreign direct investment (FDI) have managed to enhance their participationin international trade. There is the recognition among PACER Plus Parties that increased investment flows can facilitate the transfer of technology and enhance the competitiveness of countries. For the developing country Parties, which hardly attract any FDI owing to the lack of significant natural resources and small populations, FDI is rightfully seen as a source of development financing and a powerful tool for economic growth and sustainable development.
There are a number of factors which are increasingly driving FDI across borders. These include the search for new markets and the desire to exploit the natural resources of a country for mutual benefit or take advantage of the competitiveness of a country in terms of low labour and related production costs.
To facilitate the flow of investments, PACER Plus Parties intend to provide adequate guarantees to investors that their investments would be protected and not subjected to any arbitrary or discriminatory measures. Expropriations are to be tightly regulated and would be legal only upon the payment of adequate compensation to the investor in a freely usable currency. The Parties would provide non-discriminatory access to domestic courts in the event of a dispute concerning an investment. Disputes between the Parties are to be resolved through consultations. Where they fail to resolve the dispute, the Parties could have recourse to arbitration.
The Parties intend to cooperate with respect to the implementation of the provisions of the Chapter, and it is the expectation of the developing country Parties that their developed country counterparts will encourage their companies to invest in their countries.