A Cotonou Investment Agreement

The document proposes a comprehensive Cotonou Investment Agreement to replace existing bilateral investment treaties (BITs) and better align foreign direct investment with the sustainable development goals of the Cotonou Partnership Agreement (CPA). It argues that current international investment agreements focus too narrowly on investor protection and lack empirical evidence of benefiting developing countries. The proposed agreement would balance investor rights with host state obligations and public goods, incorporating principles of legitimacy, transparency, and accountability. Key recommendations include the establishment of an Observatory for ACP Investment to monitor results, a Cotonou Investment Fund to support small and medium enterprises, and the use of regional institutions to manage environmental reviews and competition authorities. The author emphasizes the need for a dispute settlement mechanism that requires the exhaustion of domestic remedies and shows deference to public policy goals, moving away from current models like ICSID or UNCITRAL.

• Existing international investment agreements are insufficient for developing countries because they focus primarily on investor protection and lack empirical evidence of generating economic benefits for host states.
• A Cotonou Investment Agreement should explicitly aim to increase long-term foreign investment in ACP countries for activities that support the host country's sustainable development goals, consistent with the CPA.
• The proposed agreement must be based on four essential principles: balance between investor rights and public goods, legitimacy, transparency, and accountability.
• To ensure effectiveness, the agreement should establish an Observatory for ACP Investment to monitor results and report to the Council of Ministers and the Joint Parliamentary Committee.
• The author advocates for the principle of 'exhaustion of remedies,' requiring investors to use domestic legal systems in countries with proven governance before seeking international arbitration.
• Current international arbitration models, specifically ICSID and UNCITRAL, are deemed unsuitable for a Cotonou agreement as they cannot adequately balance private rights with public goods.
• The report suggests that regional institutions should be used to manage resource-intensive functions such as environmental impact assessments and competition authorities to benefit smaller ACP states.
• The Cotonou Investment Agreement should replace existing bilateral investment treaties (BITs) between EU Member States and ACP countries to eliminate a fragmented and imbalanced legal patchwork.
• A dedicated Cotonou Investment Fund is recommended to provide direct and indirect funding, prioritizing small and medium enterprises (SMEs) that contribute to ACP development goals.

APA

von Moltke, K. (2003). A Cotonou Investment Agreement. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investment_cotonou.pdf

Chicago

von Moltke, Konrad. A Cotonou Investment Agreement. International Institute for Sustainable Development, 2003. https://www.iisd.org/system/files/publications/investment_cotonou.pdf.

Wikipedia

{{cite report |last1=von Moltke |first1=Konrad |title=A Cotonou Investment Agreement |publisher=International Institute for Sustainable Development |date=April 2003 |url=https://www.iisd.org/system/files/publications/investment_cotonou.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vonmoltke2003cotonou, author = {von Moltke, Konrad}, title = {{A Cotonou Investment Agreement}}, institution = {International Institute for Sustainable Development}, year = {2003}, month = apr, url = {https://www.iisd.org/system/files/publications/investment_cotonou.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }