It Takes Two to Tango: Regional Investment Treaties and Investor Protection on Both Sides of the Atlantic

Abstract

In 2009, the Treaty of Lisbon conferred the European Union the exclusive competence on foreign direct investments in Art. 207 TFEU. Together with the common commercial policy, it is now one of the main pillars of the external action of the EU. The Union has seen this new competence as good opportunity to carry out a comprehensive regulation of trade and investment issues at the European level and has applied it in the negotiation of a series of investment agreements with other States such as Canada, the United States, Vietnam, and Singapore. An intense public debate has arisen on the opportunity of entering into these agreements and whether they should include references to arbitration as an investor-state dispute settlement mechanism (ISDS). The context to this is the growing opposition to the traditional mechanisms of ISDS in some Member States and sectors of the civil society. Meanwhile, in the US, there has also been growing public opinion opposing investment treaties and external and parallel mechanisms of investor protection from both sides of the political spectrum and for various reasons. Prior to the 2016 Presidential Elections, prominent democrats opposed the Trans-Pacific Partnership (TPP) as long as ISDS mechanisms were included. The present article includes an analysis of trade policymaking in the US and the attitude of the US Congress to new mega-regionals and new investment treaties. Being a major issue in Europe, it focuses, in particular, on the policy position concerning ISDS as the method of choice for resolving disputes between investors and the host countries.