global trends in international investment agreements...
TRANSCRIPT
Global Trends in International
Investment Agreements (IIAs)
Training course for economies in transition on a new
generation of international investment policies
1- Setting the stage: an IIA system ?
2- Recent trends in IIAs
3-Emerging issues
a. New generation of investment policies
b. Rising regionalism
4- Main challenges
1. Setting the stage: an IIA system ?
• Absence of a multilateral agreement on investment (unlike trade, services, IPR)
• Absence of a global body administering the process
• International investment rulemaking lacks system-wide coordination
• Countries continue to conclude investment treaties on an individual basis
(vulnerability to bargaining power; various models; implications for economies in
transition)
• Perpetuating and accentuating the fragmentation of the IIA network
• Is there an IIA system ?
• Bilateral investment treaties (BITs)
• Free trade agreements / economic partnership
agreements with investment provisions (FTAs/EPAs)
• Regional investment agreements (EU, CEFTA,
CARICOM, MERCOSUR, COMESA, Inter-Arab IA, ASEAN
IA)
• Sectoral agreements dealing with investment in Energy
(Energy Charter)
• Preamble
• Definitions (investment/investor)
• Admission and establishment
• Core standards of protection:
• Principle of fair and equitable treatment
• Principle of non-discrimination (NT/MFN)
• Expropriation
• Transfer of funds
• Investor-State dispute settlement
2. Recent trends in IIAs
The current three-year average of one new IIA per week is considerably
lower than the 4 new IIAs per week average of the mid-1990s.
0 20 40 60 80 100 120 140 160
Spain
Czech Republic
Romania
India
Turkey
Korea, Republic of
Belgium and Luxembourg
Italy
Netherlands
Egypt
France
United Kingdom
Switzerland
China
Germany
• Total of 694 BITs, constituting 23% of the BITs universe
0
10
20
30
40
50
60
70
80
African countries 7%
Latin American countries
3% North American countries
3%
EU countries 54%
Asian countries 33%
Importance of EU
regulation No. 1219/2012
Treaty with investment provisions Signatory economies in transition
Partnership and Cooperation Agreements/Association
agreements with the EC
Armenia, Azerbaijan, Belarus, Bosnia and
Herzegovina, Georgia, Montenegro,
Kazakhstan, Kyrgyz Republic, Serbia, Ukraine,
Uzbekistan, Turkmenistan
Free Trade Agreements with EFTA States Albania, Macedonia, Serbia, Montenegro,
Ukraine,
Framework Agreements on trade and investment with
the United States of America
Georgia, Kazakhstan, Kyrgyz Republic,
Tajikistan, Turkmenistan, Uzbekistan
The Energy Charter Treaty Albania, Armenia, Azerbaijan, Bosnia and
Herzegovina, Croatia, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Tajikistan,
Turkmenistan, Ukraine, Uzbekistan, Belarus,
Russia
The Central European Free Trade Agreement (CEFTA)
and the Agreement on Amendment of and Accession to
the Central European Free Trade Agreement
Albania, Moldova, Bosnia and Herzegovina,
Montenegro, Croatia, Serbia, Macedonia
Agreement on Promotion and Reciprocal Protection of
Investments in the Member States of the Eurasian
Economic Community
Belarus, Kazakhstan, Kyrgyz Republic, Russia
and Tajikistan
3. Emerging issues
a. Towards a new generation of international investment
policies
Model with defined
scope, taking into
account national
development
strategies,
investment
promotion,
exceptions, and SD
Changing investment policy
environment
Traditional international
investment policy making
New generation of
investment policies
• Integrating international investment policies into national development
strategies
• Strengthening the development dimension in IIAs – Reference to the protection of health, labour, environmental standards
– General exceptions (e.g. for protection of human, animal or plant life or health)
– Not lowering standards clauses
– Investment promotion provisions
• Preserving regulatory space – Narrow definition of investment, detailed clauses on FET or indirect expropriation, exceptions
to free transfer of funds, carve-outs for prudential measures).
– Minimizing exposure to ISDS (e.g. excluding treaty provisions or policy areas from ISDS,
limiting time period for submitting claims.
• Balancing the rights and obligations of States and investors – Reflecting investor responsibilities in IIAs
– Learning from CSR principles
Source : UNCTAD
Source : UNCTAD
3. Emerging issues
b. Rising regionalism: challenges and opportunities
More than 110 countries are currently involved in
22 regional negotiations (agreements involving
more than two countries)
PACER
Source : UNCTAD
Most treaty provisions governing the relationship between regional agreements and other
(investment) treaties allow for the continuing existence of the BITs in parallel with the regional treaty
22
• China-Singapore investment framework is governed not only by two
but by three overlapping agreements:
- Investment provisions of the China-Singapore FTA
- The China-Singapore BIT
- The ASEAN-China Investment Agreement
• The parties endorse the existence of parallel treaties by re-affirming
the continued validity of existing agreements in various ways
• They, however, provide little guidance on how to deal with the
ensuing overlap
Indonesia-Thailand BIT
(1998) (members of ASEAN)
• Vague language
• No public policy
carve-outs
!
ASEAN CIA (2009)
• Specific language
• Public policy
carve-outs
Parallel IIAs may create situations where a single government measure could be challenged by the investor under
different IIAs. This increases the possibilities available to foreign investors to sue governments.
• If certain conditions are met, regionalism can provide an
opportunity to consolidate and rebalance the IIA system
• The negotiating process of regional investment
agreements may create a conducive environment for
countries to express specific developmental concerns
• Regional cooperation on investment can establish useful
precedents and build consensus among countries on core
elements of investment protection and sustainable
development
• This may spur a constructive dialogue on international
investment policy, representing a crucial step towards
multilateralism
Source : UNCTAD
IIA negotiations nevertheless present a window of opportunity to
consolidate the existing network of BITs.
4. Main challenges