Trade and Investment Frameworks in Extractive Industries: Challenges and Options

At the domestic level, if managed properly, the revenues from extractive industries can have a substantial impact on income and prosperity while respecting community needs and the environment. To achieve this, host countries often need to strike a delicate balance between offering attractive terms and guarantees for foreign investment, and concurrently creating domestic employment, generating revenues, and protecting the interests of local communities. International trade and investment frameworks thus have a central role to play in ensuring that trade in natural resources effectively results in transformative development and inclusive growth, while simultaneously providing fair and predictable access on global markets for countries that rely on such resources. As a contribution to this debate on the international governance of extractive industries, the E15 Expert Group on Trade and Investment in Extractive Industries, jointly convened by ICTSD, the World Economic Forum, and the International Institute for Sustainable Development (IISD), started by identifying major sustainable development challenges and opportunities in the sector that could be effectively addressed through trade and investment frameworks. It then assessed the adequacy of the global trade and investment system to respond to both longstanding and emerging challenges, and suggested policy options and possible reforms to address them more effectively. In doing so, the Expert Group focused its attention more specifically on fuels and minerals.