New Model of Investment Protection Under CETA

Abstract

This chapter examines the new method of investment dispute resolution introduced by the Comprehensive Economic and Trade Agreement (CETA). The traditional method of resolving investment disputes was through international arbitration, and most bilateral investment treaties and comprehensive trade agreements followed this model. This was because foreign investors could not reasonably trust domestic courts to resolve disputes in a trustworthy manner. Hence, it became common practice to seek a “neutral” method, which was provided by the concept of international arbitration. Even international organizations created for the purpose of solving disputes (such as the ICSID) were still tied to arbitration. This stands in contrast to the CETA, which established a permanent form of dispute settlement through an international court system. This chapter thus focuses on introducing this new concept and explains its strengths and potential disadvantages, in particular the enduring threat of regulatory chill. Besides the content and evaluation of the new Investment Court System (ICS), the chapter also briefly examines the negotiation and creation process behind the comprehensive trade agreement.