A bilateral investment treaty between two nations ensures that no flows of investment will take place across their nations and thereby insulates them from destabilizing volatility of flows of foreign direct investment and portfolio investment.

Question

Quizplus · Accepted Answer

This statement is incorrect. A bilateral investment treaty (BIT) between two nations actually encourages and protects flows of foreign direct investment (FDI) and portfolio investment between them, by providing legal protection to investors from one country in the other country. A BIT usually includes provisions for protection of intellectual property, non-discriminatory treatment, and dispute resolution mechanisms, among other things, to create a more conducive environment for investment.

A Bilateral Investment Treaty Between Two Nations Ensures That No