Diffusion of Bilateral Investment Treaties 815 200 Number of treaties signed Average FDI Average 150- 6 100 inflows 50- GDP) 0- 1960 1970 1980 1990 2000 Year FIGURE 1.Number of bilateral investment treaties signed and mean global foreign direct investment as a proportion of GDP,by year,1959-99 may have feared that BITs represented a threat to its claim that investment was already protected under customary international law.Moreover,potential hosts may have had incentives to resist the relatively onerous provisions the U.S.govern- ment typically tried to secure.One of the prime differences between the terms typically offered by the Europeans and the United States at this time was the former's emphasis on investment protection and the latter's additional insistence on liberalization.18 It was not until 1981 that the United States changed its view on BITs.There is evidence that some officials in the administration of U.S.President Ronald Reagan viewed BITs as an alternative way to protect the principles contained in the embat- tled Hull Rule.Secretary of State George Schultz argued that BITs were designed "to protect investment not only by treaty but also by reinforcing traditional inter- national legal principles and practice regarding foreign direct private invest- 18."Multilateral or Bilateral Investment Negotiations:Where Can Developing Countries Make Them- selves Heard"Briefing Paper No.9.Available at (http://cuts-international.org/9-2002.pdf).Accessed 12 July 2006.Some observers note that the insistence on liberalization explains the inability of the United States to secure agreements with East and Southeast Asian countries until quite recent years; see Reading 1992.may have feared that BITs represented a threat to its claim that investment was already protected under customary international law+ Moreover, potential hosts may have had incentives to resist the relatively onerous provisions the U+S+ govern￾ment typically tried to secure+ One of the prime differences between the terms typically offered by the Europeans and the United States at this time was the former’s emphasis on investment protection and the latter’s additional insistence on liberalization+ 18 It was not until 1981 that the United States changed its view on BITs+ There is evidence that some officials in the administration of U+S+ President Ronald Reagan viewed BITs as an alternative way to protect the principles contained in the embat￾tled Hull Rule+ Secretary of State George Schultz argued that BITs were designed “to protect investment not only by treaty but also by reinforcing traditional inter￾national legal principles and practice regarding foreign direct private invest- 18+ “Multilateral or Bilateral Investment Negotiations: Where Can Developing Countries Make Them￾selves Heard” Briefing Paper No+ 9+ Available at ^http:00cuts-international+org09-2002+pdf&+ Accessed 12 July 2006+ Some observers note that the insistence on liberalization explains the inability of the United States to secure agreements with East and Southeast Asian countries until quite recent years; see Reading 1992+ FIGURE 1. Number of bilateral investment treaties signed and mean global foreign direct investment as a proportion of GDP, by year, 1959–99 Diffusion of Bilateral Investment Treaties 815