An Enabling Regulatory Environment for Sustainable Investment: The Example of Trade Law

There is broad international agreement that investment flows to the agricultural sector in developing countries need to be increased. But there is also agreement that such investments need to be sustainable. For being sustainable, they must not only be beneficial to the public economy, but also to rural households and to the environment in the short and the long run. Whether sustainable investments take place, not least depends on the legal framework within which these investments are situated. This is true for the domestic legal frameworks of both the home country and of the host country of the investment. But also the international legal frameworks in which home and host states are embedded set either positive or negative incentives for investments to be sustainable. The paper presents an overview on regulatory frameworks which come to focus in this regard. It then elaborates on international agricultural trade regulation, by assuming that sustainable investments in agriculture presume a ‘sustainable trade regime’. By doing so, the paper presents parts of the debate about a sustainable agricultural trade regime, as it has been resumed and further developed by the author in recent years. Key words. Agricultural sector, sustainable investment, regulatory environment, sustainable trade regime