Abstract
The Investor State Dispute Settlement (ISDS) mechanism, included in over 3000 treaties, has raised widespread concerns, particularly as investors increasingly challenge measures related to environmental protection, public health and safety, and financial stability. Even some investors – the purported beneficiaries – have voiced concerns about the costs of proceedings, uncertainty regarding outcomes of disputes, and an absence of rules to ensure the impartiality of arbitrators. As states continue to include ISDS in their treaties, this analysis argues that the costs of ISDS outweigh its alleged benefits, and alternative strategies should be employed to protect investors and promote the rule of law.
Highlights
The negotiation of several mega-treaties in 2015, including the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive Economic and Trade Agreement (CETA), and other regional agreements, has generated substantial public discussion about the protections and privileges afforded to multinational enterprises through the investor–state dispute settlement (ISDS) mechanism in these treaties
The TPP negotiating parties deflected the underlying concerns about ISDS by assuring constituents that ISDS would be included in the TPP in an improved “21st century” form, resolving the controversial elements
When the text of the TPP was released in November 2015, it became evident that while the ISDS mechanism in the TPP includes some changes around the margins, its basic elements remain generally unchanged
Summary
The negotiation of several mega-treaties in 2015, including the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive Economic and Trade Agreement (CETA), and other regional agreements, has generated substantial public discussion about the protections and privileges afforded to multinational enterprises through the investor–state dispute settlement (ISDS) mechanism in these treaties. An analysis of ISDS as included in the TPP shows that the costs outweigh the alleged benefits, and alternative strategies should be employed to protect investors and promote the rule of law.
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