EU Reform Agenda in Defence of the Judicialization of International Economic Law

Abstract

A widely-recognized ‘backlash against globalization’ has taken many forms in recent years, particularly in the resurgence of nationalism and protectionism. Following the rise of a legitimacy crisis in the international regime for the protection of investments, the Trumpanian attack on the World Trade Organization (WTO) Appellate Body undermines a crucial function of this organization. In this context, the European Union has traditionally been seen as an advocate of the rule of law at an international level. Currently, it leads the way to maintain rules-based global economic governance by submitting detailed proposals to reform international trade and investment adjudication bodies and galvanizing broad support for them amongst other countries. Specifically, the European Union (EU) proposes the establishment of a multilateral investment court (MIC), which it considers to be the best option to address the concerns with the existing system of investor-State dispute resolution (ISDS). At the WTO, the EU has tabled two sets of proposals to answer concerns from the US and modify the relevant parts of the Dispute Settlement Understanding (DSU). After the collapse of the WTO Appellate Body, the EU led an initiative to create an interim appeal arbitration arrangement. This article argues that, in the absence of leadership by the US, the EU plays an essential role in maintaining trade and investment governance built on international law. This article identifies two different EU approaches in its attempt to (1) modernize an existing adjudication body at the WTO and (2) promote establishment of a new judicial institution for the resolution of investment disputes. In both ways, the EU acts as an innovator in terms of international governance. European Union, reform, judicialization, WTO, Appellate Body, UNCITRAL, investor-state dispute settlement (ISDS), multilateral investment court