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Events

The E15 engages key stakeholders – trade and investment policy makers, business and thought leaders – in policy dialogues in Geneva and around the world to explore and help validate ideas, align interests and strengthen the impetus for change.

RTA Exchange Dialogues

Ongoing Evolution of Investment Policymaking in RTAs and IIAs

13 June 2018 , Geneva, Switzerland

The aim of this multistakeholder dialogue was to tap into the wealth of information emerging from recent international investment agreements (IIAs) and regional trade agreements (RTAs), in order to understand how trade and investment concerns are being jointly addressed to suit the needs of 21st century patterns of production.

The meeting examined how investment provisions have evolved in recent years, the ways and means through which they are integrated into investment and trade frameworks, and the impact of including such provisions to achieve sustainable development outcomes.

The main types of provisions analysed were host state flexibilities; investment protection provisions; investor-state dispute settlement mechanisms; and sustainability provisions.

Main takeaways

  • IIAs increasingly including sustainability provisions in preambles, general public policy exceptions clauses, and specific clauses in the text. These provisions, however, remain largely aspirational. A question is whether there is a need to shift from aspirational to binding provisions in order to foster responsible investor behaviour and achieve sustainable development outcomes. Recent sustainability relevant chapters enforceable through state-to-state procedures are an important step in that direction.
  • Industrial policy is an increasingly active issue in investment jurisprudence. Prohibitions can be categorised under three approaches: 1) silent approach – no specific provision on industrial policy, the claimant uses traditional investment provisions such as fair and equitable treatment and national treatment to counter a host state policy measure; 2) WTO approach – reaffirmation of WTO rules on Trade-Related Investment Measures (TRIMs), where disciplines on technology transfer and services are therefore excluded; and 3) WTO-plus approach – extending beyond TRIMS, which usually covers performance requirement disciplines on services and technology transfer. Industrial policy will be an increasingly relevant issue driving fragmentation within the investment regime. Additional guidance on strategic industrial policy measures in investment jurisprudence will be key to managing this fragmentation.
  • ISDS reforms are resulting in a fragmented landscape: developed countries are pursuing procedural reforms, and developing countries are initiating more substantive reforms and alternative modes (e.g. exhaustion of local remedies (India); emphasis on dispute mediation and prevention (Brazil); separate regional state-to-state tribunal (Southern African Development Community)). Going forward a key question will be how these different systems co-exist. Will there be a need for a dispute settlement à la carte institutional structure?

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The event built on previous ICTSD dialogues and ongoing research on investment policymaking.

Attendance was by invitation only.

This meeting is part of the RTA Exchange dialogue series aimed at constructing better trade and investment agreements for sustainable development at the regional and multilateral levels.

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