United Nations Conference on Trade and Development (UNCTAD), Investment and Innovation Policy Review: Ethiopia (2002), UNCTAD, Geneva, 1. 2 The first of such Bits was the one concluded between Germany and Pakistan in 1959. BITS were "initially concluded mainly between developed countries and developing countries" although this trend has clearly changed at present. See Sacerdoti, Giorgio, The Sources and Evolution of International Legal Protectionfor Infrastructure Investment Confronting Political and Regulatory Risks, World Bank Conference on Political and Regulatory Risks in Private Infrastructure Investment, Rome (Italy), (on file with the author), 14. However, developing countries also began concluding BITS amongst themselves with the view to exhausting all possible sources of investment and showing economic and political solidarity over their development endeavors. ' UNCTAD, World Investment Report, 2005: Transnational Corporations and the Internationalization of R&D (2005), UNCTAD, Geneva, 24.

4 See, for instance, Article 2(1) of Investment Proclamation No. 280/2002, Federal Negarit Gazeta - No. 27, 2nd July, 2002 ("Investment Proclamation" hereinafter). 5 Encyclopaedia of Public International Law, Vol. 8, p. 246, cited in M. Somarajah, The International Law on Foreign Investment, (Cambridge University Press, Cambridge), 2004, 7. 6 See Id. 7 See article 1(1) of the Agreement between the Czech Republic and the Republic of Tunisia for the Promotion and Reciprocal Protection of Investments, signed at Tunis, on 6 January 1997.

" FW refers to an investment carried out by a foreign investor by being physically present in the country where the investment takes place and she is in control of the management aspects of the investment; whereas portfolio investment refers to an indirect investment which participates the foreign investor only indirectly such as through buying shares, debentures and bonds. y See M. Somarajah, 51.

10 Ibid, 57. 11 Note that the economies of developed countries have developed, arguably, at the expense of those of the developing countries for historical reasons such as the slave trade and colonialist exploitation of the resources of the now developing countries. 12 M. Sornarajah, 63.

t3 GA Res. 3281 (xxix), UN GAOR, 29th Sess., Supp. No. 31 (1974) 50, available at http://www.vilp.de/ Enpdf/el62.pdf, accessed on 31 July 2008. Note that this Charter remained only as a General Assembly Resolution and is not binding yet. As the practice of states is very varied since then, one cannot think of it crystallizing into customary international law as well. �4 This gave rise to what became to be known as the "Calvo doctrine", which is mainly championed by Latin American countries. According to this doctrine, aliens and their property in a foreign land shall be entitled only to the same treatment that is available to nationals of that country in accordance with its domestic laws. s See M. Sornarajah, 18.

16 See Article 159 (1), The Treaty Establishing the Common Market for Eastern and Southern Africa, signed on 5 November 1993. 17 Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States, of the one Part, and the European Community and its Member States, of the Other Part, Signed in Cotonou, Benin, on 23 June 2000.

1H Id., Article 78 (1). 19 Id., Article 78 (3). z° Committee on Legal Aspects of Sustainable Development, International Law Association, London Conference Report (2000), 4. As expressed above, currently there are more than 2,392 BITS in the world. 21 There are evidences that show that some developed countries are not willing to enter into a multilateral obligation for fear of loss of sovereignty in making their own policies on certain issues. For example, the French had to withdraw from the OECD negotiation on MAI in autumn of 1998 due to lack of willingness to open investment areas such as the cultural industry. They feared that the sector will be overwhelmed by US multinational companies. See Committee on Legal Aspects of Sustainable Development, 4; See also M. Somarajah, 292-293 and 297. 22 This term 'bilateral treaties' is usually named in different ways. To give a few examples, names such as Agreement (e.g., Agreement between Ethiopia and Kuwait on the Encouragement and Reciprocal Protection of Investment ("Ethio-Kuwait BIT" hereinafter), signed on September 14, 1996); Protocol (e.g., Protocol between Ethiopia and Denmark on the Promotion and Reciprocal Protection of Investment, signed on April 24, 2001); and Memorandum of Understanding (c.g., Memorandum of Understanding between Ethiopia and Libya on Investment, signed on August 12, 1999) are commonly used. Please, note also that the BITS used in this research are accessible at UNCTAD'S website: http://www.unctadxi.org/templates/Startpage 718-aspx.

23 See M. Somarajah, 212. z4 See Agosin, Manuel R. and Mayer, Ricardo, Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment? UNCTAD Discussion Paper No. 146 (February 2000), 1. zs Ethiopia is also a party to the World Bank conventions mentioned above but not to the WTO agreements yet.

zb Corea, Carlos M., Investment Protection in Bilateral and Free Trade Agreements: Implications for the Granting of Compulsory Licenses, Michigan Journal o_f International Law (2004), Vol. 26, No. 1, 332. See also, generally, UNCTAD, Economic Development in Africa: Rethinking the Role of Foreign Direct Investment, UNCTAD, Geneva (2005), 64-81. 27 Ethiopian Investment Commission, Investment Review, Quarterly Newsletter, Vol. 8, No. 16 (September 2005), 3. ze C.M Corea, 332. z9 See UNCTAD, World Investment Report, 2003, FW Policies for Development: National and International Perspectives, UNCTAD, Geneva (2003), 89.

30 Victor Musoti, Non-discrimination and its Dimensions in a Possible WTO Framework Agreement on Investment: Reflections on the Scope and Policy Space for the Development of Poor Economies, The Journal of World Investment (Werner Publishing, Geneva), Volume 4, December 2003, 1025. '� Id. 3z UNCTAD, International Investment Agreements: Key Issues, UNCTAD, Geneva (2004), 185.

3j The tribunal in S. D. Myers, Inc. v The Government of Canada (2000), ICSID stated, under para. 259, that "the 'minimum standard' is a floor below which treatment of foreign investment must not fall, even if a government were not acting in a discriminatory manner". Note that the international minimum standard refers to protections available in customary international law. 3^ Article 1105 has caused many challenges to the parties though it was meant to serve as an example of higher treatment for foreign investment. One of the challenges is the extent to which the term "international law" should be interpreted (conventional or customary international law) and whether "fair and equitable treatment and full protection and security" could be taken as part of "international law" or whether they should be seen independently of it. Some tribunals have argued that "fair and equitable treatment and full protection and security" are additive while others have argued that they are illustrative (Barutciski, Milos, In the Eye of the Beholder: A Commentary on the Investor Protection under CAFTA (on file with the author), footnote 14). Such divergent interpretations raised fear that such broad protection might trigger unintended MFN obligations in favor of third country agreements and the parties issued, in 2001, an interpretation that limits minimum standards of treatment to customary international law only and for "fair and equitable treatment and full protection and security" to be considered part of customary international law and not as additives to it. 35 See UNCTAD, International Investment Agreements; Key Issues, 26.

3s See e.g., Ethio-Netherlands BIT, Article 3 (2). See for e.g. Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the People's Republic of China Concerning the Encouragement and Reciprocal Protection of Investments, signed on 3 May 1998 (Ethio-China BIT); and the Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of Malaysia for the Promotion and Protection of Investments, signed on 2 October 1998 (Ethio-Malaysia BIT). These BITS simply require equitable treatment and full security and protection for investments made under them.

5� S.D. Myers, Inc. v The Government of Canada, paras. 243 and 250. 31 M. Sornarajah, 235. 4° Victor Musoti, 1025-1026.

z See e.g. US-Azerbaijan BIT, Article n (1); See also Kenneth J Vandevelde, The Economics of Bilateral Investment Treaties, Harvard International Law Journal, Vol. 41, No. 2 (2000), 493 (footnote 203). ^2 See e.g. Ethio-China BIT, Article 1 (1). 43 See Ibid, Article 2 (1).

44 M. Somarajah, 257. 45 Article 2 of the Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the Republic of the Sudan on the Reciprocal Promotion and Protection of Investments, signed on 7 March 2000 (Emphasis added). See also Art. 2 and 3 (6) of the Ethio-Kuwait Brr; Art. 2 and 3 (5) of the Ethio- Netherlands BIT; Art. 2 (1) of the Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the Russian Federation on the Promotion and Reciprocal Protection of Investments signed on 26 November 2003.

^6 Agreement between the Belgian-Luxembourg Economic Union, on the one hand, and the Federal Democratic Republic of Ethiopia, on the other hand, on the Reciprocal Promotion and Protection of Investments, signed at Brussels on 26 October, 2006. 4� See K. Vandevelde, 483-84. See also OECD's compilation on the List of Measures Reported as Exceptions to National Treatment, available at http://www.oecd.org/dataoecd/32/21/1954854.pdf, accessed on 29 April 2006. Note that countries that are Members to the WTO cannot impose requirements such as local content, trade balancing purchases, trade balancing exports and limitations on foreign exchange. That is so because such impositions might distort trade in the parlance of the Trims Agreement. It should be underlined, however, that TRIMS does not cover limitations on foreign investment in areas such as the participation of local equity, R&D, transfer of technology, participation of local personnel and so on. Article 3 of the TRIMS also allows exceptions under GATT Article xx, which introduces a host of grounds of limitation fulfilling the specific requirements. 4$ Providing Foreign Nationals of Ethiopian Origin with Certain Rights to be Exercised in their Country of Origin Proclamation No. 270/2002 ("Foreigners of Ethiopian Origin Proclamation" hereinafter).

4y Investment Proclamation, Art. 4. 50 It is important to note that compensation in case of expropriation or nationalization is a constitutional right of investors according to Article 40 (8) of the Ethiopian Constitution (Without prejudice to the right to private property, the government may expropriate private property for public purposes subject to payment in advance of compensation commensurate to the value of the property). In line with this, the Investment Proclamation guarantees adequate compensation corresponding to the prevailing market value of property and such payment to be effected promptly. 51 See Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulations No. 84/2003 ("Regulation" hereinafter). s2 The Proclamation reserves investments in transmission and supply of electrical energy through the integrated national grid system, air transport services using aircraft with a seating capacity of more than 20 passengers and postal services, with the exception of courier services, exclusively for government. It also reserves manufacturing of weapons and ammunition and telecommunication services for joint venture with the government (See Art. 5 and Article 3(3) of the Investment Proclamation and the Investment (Amendment) Proclamation No. 375/2003. Please, note that this amendment Proclamation number is wrongly written as "373/2003" in the English text.) It should be underlined that the exclusion of private investment or the requirement of joint venture with the government in these sectors applies both to domestic as well as foreign investors. To this extent, notwithstanding the argument that these limitations discourage foreign investment in these sectors, the provisions do not contradict with the nondiscriminatory treatment commitment. Further, Article 6 of the Investment Proclamation and Article 3 of the Regulation reserve about two dozens of specific areas of investment for domestic investors only.

5 Ethiopian laws on nationality do not allow dual citizenship and nationals automatically lose their nationality when they acquire another nationality (see Art. 20(1), Ethiopian Nationality Proclamation No. 378/2003). To be considered as a domestic investor, the person who has lost his Ethiopian nationality has to acquire the status of foreigner of Ethiopian origin. To get the status of foreign national of Ethiopian origin, again, inter alia, she must be an Ethiopian national before acquiring a foreign nationality or at least one of the parents or grand parents or great grand parents was an Ethiopian national; and she must obtain an identification card that certifies that she is a foreign national of Ethiopian origin. s^ Compare Foreigners of Ethiopian Origin Proclamation, Art. 5. ss Ibid., Art 6 (1). Note also that rights and privileges as well as restrictions on foreign investors would not apply to foreign nationals considered as domestic investors (Article 37 (1) of the Investment Proclamation).

Sfi Note that some developing countries such as India and Pakistan also use similar schemes to promote ties and investments by persons of their national origin. 5� M. Sornarajah, 295.

58 KJ Vandevelde, 493. s9 See Article xx of the General Agreement on Tariffs and Trade (GATT) and Article XIV of the General Agreement on Trade in Services (GATS). h° See Article xxi of the GATT, Article xivbis of the GATS and Article 73 of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). 61 See Article 7(1) of the Ethio-Israel BIT,