Investment Agreement of the Americas

The document warns against adopting a deregulatory investment model for the FTAA, citing the destabilizing effects of short-term speculative capital flows seen in the Asian and Mexican financial crises. It argues that broad definitions of investment and 'national treatment' provisions in NAFTA and the MAI would prohibit essential capital controls and 'speed bumps' used by countries like Chile and Colombia to maintain economic stability. Furthermore, the text contends that such rules threaten environmental protection by allowing corporations to sue governments for 'regulatory expropriation' and by banning performance requirements that mandate technology transfer to developing nations. The authors recommend that any hemispheric agreement must preserve the right of states to regulate currency convertibility, mandate technology transfer, and utilize transparent dispute resolution mechanisms that include civil society participation.

• The proposed FTAA investment framework, if modeled after NAFTA and the Multilateral Agreement on Investment (MAI), would severely limit the ability of governments to regulate short-term speculative capital flows to prevent or manage financial crises.
• Financial liberalization in East Asia prior to 1997 was a primary cause of the regional crisis, characterized by a massive reversal of private international capital flows totaling $105 billion, which represented approximately 11 percent of the combined GDP of South Korea, Indonesia, Malaysia, Thailand, and the Philippines.
• Mexico's 1994 peso crisis was exacerbated by a laissez-faire approach to capital inflows, where portfolio inflows reached 7.7% of GDP in 1993 compared to only 1.4% for Foreign Direct Investment (FDI).
• Capital controls, such as the non-interest bearing reserve requirements used by Chile, have proven effective in tilting capital flows toward longer maturities and insulating economies from speculative volatility without hindering growth.
• The 'national treatment' principle in investment treaties can be used by foreign investors to challenge national policies, potentially granting them better treatment than domestic firms and increasing economic vulnerability.
• Broad definitions of 'expropriation' in NAFTA Chapter 11 allow corporations to seek compensation for legitimate public interest regulations, effectively forcing governments to 'pay to regulate' polluters.
• NAFTA's prohibition on 'performance requirements' prevents developing countries from mandating the transfer of environmentally sound technology as a condition for accessing natural resources, which undermines global sustainable development goals.
• The investor-to-State dispute settlement mechanism is criticized for being structurally biased, secretive, and excluding the participation of affected local communities and sub-national governments.

APA

Center for International Environmental Law (1999). Investment Agreement of the Americas. https://www.ciel.org/wp-content/uploads/2015/03/miamiinvestmentpaper.pdf

Chicago

Center for International Environmental Law. Investment Agreement of the Americas. 1999. https://www.ciel.org/wp-content/uploads/2015/03/miamiinvestmentpaper.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=Investment Agreement of the Americas |date=1999 |url=https://www.ciel.org/wp-content/uploads/2015/03/miamiinvestmentpaper.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw1999investment, author = {{Center for International Environmental Law}}, title = {{Investment Agreement of the Americas}}, institution = {Center for International Environmental Law}, year = {1999}, url = {https://www.ciel.org/wp-content/uploads/2015/03/miamiinvestmentpaper.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }