Investment Protection Agreements

Should a Multilateral Approach be Reconsidered?

in The Journal of World Investment & Trade
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The Journal of World Investment & Trade

Law • Economics • Politics


I The UNCTAD Series on Issues in International Investment Agreements uses the term "international investment agreements,". In this article the term "investment protection agreements" is used to refer not only to bilateral investment agrccmcnts (Brrs) but also to broader trade and investment agreements, such as the North American Free Trade Agreement (NAFTA), that contain provisions on investment protection similar to those contained in Brrs, but not to other international agreements that may contain different provisions on investment or that may be broader in scope, such as the Treaty establishing the European Community. 2 UNCï/t[) Handbook rf Statistics On-line Database; Forei>?,1l Dirert Investment Database; available at: «http://www.unctad.orgn,. UNCTAD'S statistics should be considered with a degree of caution since they may not accurately depict each country's situation and it is not immediately clear whether the agreements have entered into force. For instance, the Database shows Mexico as having subscribed fifteen BITS by 2002, where Mexico in fact had subscribed eighteen, three of which have not yet entered into force (Mexico has concluded one other BIT, which has not yet been signed); sec: «'= 1210)). Additionally, Mexico has entered into seven free trade agreements which contain a specific chapter on investment protection essentially equivalent to that contained in its BITS, and these have all entered into force; see: <>. Thus, Mexico in fact has twenty-five IPAI (see supra, footnote 1), three of which have not yet entered into force. Similarly, Chile had by 2002 concluded free trade agreements with Canada and South Korea which contain investment protection provisions similar to those of its BITS (in 2003, Chile also concluded with the United States a free trade agreement with similar investment provisions; ;u at August 2003, it is still in the legislative approval process in both countries); see: �r. Such agreements are not included in UNC:Tnt�'s Database. On the other hand, Brazil has concluded fourteen BITS according to UNCTAD), but none of them have entered into force. Nevertheless, statistics provided by UNCTAD are very helpful and, even if not entirely accurate, they certainly show the prevailing trends in this field. 3 Id.

^ The first such attempt was the Havana Charter of 1948.

5 This term is used here broadly and not with the strict legal meaning of binding precedents.

1, Of the recent cases administered by the ICSID, one was brought against Spain by an Argentine investor under the Argentina-Spain BIT, and three have been brought against the United States under the NAFTA by Canadian investors. The United States faces another claim also brought by a Canadian investor under the NAFTA, but that arbitration is subject to the Arbitration Rules of the United Nations Commission for International Trade Law. Four cases have been brought against Canada under the NAFTA by U.S. investors, none of them under the Icsm rules. 7 UNCTAD reports Brazil's foreign direct investment inflows going up from US$ 989 million in 1990 to US$ 32.8 billion in 2000; see Unctad, supra, footnote 2.

x UNCTAD Series on Issues in International Investment Agreements, Trcnds in Il1tenwtiollal I1/vestment Agreements: An OvenJicw, UNCTAD, New York and Geneva, 1999, p. 47. 9 M. Somarajah, The Irrternational Law on Foreigii Investment, Cambridgc University Press, Cambridge, U.K., 1994, p. 235.

"' See generally Rudolf l7olzer and Margretc Stevens, Trilateral Investment Treaties, Martinus NijhoffPublishcrs, The Hague, Boston, London, 1995; Sornarajah, ibid.. Chapter Six. See also UNClAD Scries on Issues in International investment Agreements, supra, footnote 8, pp. 44-47.

� � J.C. Thomas, Reflections on Article 110.5 of NAh 1;4: History, State Practice and Influence of Commentators, Icsil) Rev.-F.I.L.J., Vol. 17, Not. 1, 2002, pp. 25 and 28. 12 Ibid., p. 22.

13 On this subject, see generally Thomas, ibid. 14 See, for instance, the Note ofInterpretation of the NAFTA Free Trade Commission of31 July 2003, available at: «»; the Agreement for the Reciprocal Promotion and Protection of Investments between Mexico and the Czech Republic, available at: «http://www.economia.gob.rnac/?P=1210»; and the Free Trade Agreements between Chile and Canada, Chile and the United States, Chile and South Korea, and the United States and Singapore. �5 Thomas, supra, footnote 11, pp. 27-28. 16 Dolzer and Stevens, siipra, footnote 10, pp. 9R-104. 17 Id.

m Sec UNCTAD Series on Issues in International Investment Agreements: the MAr, UNCTAD, New York and Geneva, 1999.


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