{"id":3864,"date":"2010-10-24T20:02:20","date_gmt":"2010-10-25T00:02:20","guid":{"rendered":"http:\/\/www.journals.law.harvard.edu\/ilj\/?p=3864"},"modified":"2013-10-09T15:52:52","modified_gmt":"2013-10-09T19:52:52","slug":"online_52_wells","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/ilj\/2010\/10\/online_52_wells\/","title":{"rendered":"The Emerging Global Regime for Investment: A Response"},"content":{"rendered":"

Responding to Jeswald W. Salacuse, The Emerging Global Regime for Investment<\/em>, 51 Harv. Int\u2019l L.J.<\/span> 427 (2010)<\/a>.<\/h3>\n

I.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Introduction<\/h4>\n

Professor Salacuse argues that today\u2019s network of investment treaties adds up to an emerging global \u201cregime\u201d for international investment.[1]<\/a> He defines \u201cregime\u201d as do international relations scholars: \u201cprinciples, norms, rules, and decision-making\u00a0 procedures around which actors\u2019 expectations converge in a given area of international relations\u201d[2]<\/a> and adds that to qualify as a regime the network must \u201cconstrain and regularize the behavior of participants, affect which issues among protagonists move\u00a0 on and off agendas, determine which activities are legitimized or condemned, and influence whether , when, and how conflicts are resolved.\u201d[3]<\/a><\/p>\n

Salacuse\u2019s conception of the regime does not include other arrangements that set out additional or overlapping principles, norms, and rules for international investment.\u00a0 Specifically, he does not incorporate the investment rules associated with the World Trade Organization (WTO). \u00a0Yet, both the Agreement on Trade-Related Investment Measures (TRIMS), which restricts host countries\u2019 imposition of performance requirements on foreign investors, and national schedules under the General Agreement on Trade in Services (GATS), which ensure market access to certain investors, cover part of the agenda of home countries in earlier negotiations for a truly multilateral agreement on foreign investment.\u00a0 These rules now surely form part of any emerging global investment regime.\u00a0 Of course, the \u201cregime\u201d has not generated international law that is binding on non-treaty countries.\u00a0 As a result, it does not cover a large part of investment flows, particularly those between rich countries.\u00a0 In addition, it has not yet created a really common set of principles, because language differs considerably from treaty to treaty and only limited common interpretation has emerged from arbitration tribunals.\u00a0 Subject to these caveats, Salacuse\u2019s conclusion is reasonable: an international regime for investment is emerging through the spread of bilateral investment treaties (BITs), investment provisions in bilateral and regional trade agreements (RTAs), and dispute settlement clauses of individual investment agreements.[4]<\/a> Salacuse\u2019s exploration of the emerging investment regime and its key differences from most international regimes clarifies some of the special challenges the regime faces in retaining developing countries as adherents.\u00a0\u00a0 Its unusual origins and structure carry important consequences for those who wish to encourage developing countries to remain in the regime.\u00a0 One feature is the fact that the existing regime makes it difficult for host countries to benefit from learning by experience.\u00a0 A second problematic outcome is that the scope of \u201cinvestment\u201d covered by the regime has frequently been stretched beyond what many host countries probably intended when they signed investment treaties.\u00a0 The third issue is the absence of significant \u201cescape clauses,\u201d safeguards that have played crucial roles in making other international regimes politically acceptable and long-lived.\u00a0 Finally, the unusual structure makes it extremely difficult for concerned parties to effect constructive change.<\/p>\n

. . .<\/p>\n

Read full article (PDF)<\/a><\/p>\n

\n

[1]<\/a> See <\/em>Jeswald W. Salacuse, The Emerging Global Regime for Investment<\/em>, 51 Harv. Int\u2019l L.J. 427, 431 (2010).<\/p>\n

[2]<\/a> Id.<\/em> at 431 (quoting Stephen D. Krasner, Structural Causes and Regime Consequences: Regimes as Intervening Variables<\/em>, in<\/em> Power, the State, and Sovereignty: Essays on International Relations 113, 113 (2009)).<\/p>\n

[3]<\/a> Id.<\/em> (quoting Donald J. Puchala & Raymond F. Hopkins, International Regimes: Lessons from Inductive Analysis<\/em>, 36 Int\u2019l Org. 245, 246 (1982)).<\/p>\n

[4]<\/a> Political scientists who have explored the \u201cregime nature\u201d of current rules on foreign investment have also tended to ignore the investment rules embodied in the WTO and the GATS, although they have generally accepted the view of the system as making up a regime.\u00a0 Schill argues a somewhat different point, that the current regime is approaching the equivalent of a multilateral regime because of its most-favored-nation provisions and the possibilities of treaty shopping.\u00a0 See <\/em>Stephan W. Schill, Investment Treaties: Instruments of Bilateralism or Elements of an Evolving Multilateral System? 9\u201315 (Global Admin. L. Viterbo IV Working Paper, 2008), available at<\/em> http:\/\/www.iilj.org\/GAL\/documents\/Schill.pdf.\u00a0 One might also add to Salacuse\u2019s list unambiguous consent to the International Centre for Settlement of Investment Disputes (ICSID) (or other) arbitration provided by some countries in their legislation.\u00a0 When such exists, a country opts into the regime without the need of BITs, RTAs, or clauses in investment agreements.\u00a0 In spite of the emerging international regime, unilateral actions persist.\u00a0 The United States still threatens to cut off aid, withdraw its generalized system of preferences (GSP), and vote against multilateral loans for countries that take U.S. property without prompt and adequate compensation.\u00a0 One might also consider national and multilateral political risk insurance organizations as part of any regime. The Overseas Private Investment Corporation (OPIC), for example, has insured investors against non-payment of arbitration awards.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sources of instability in the emerging global regime for foreign investment lie in its origin in dispersed negotiations for bilateral treaties and in the absence of a central organizational authority. Given the lack of convincing evidence that the regime encourages more investment or lowers its cost, one might ask whether the system is worth trying to preserve.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[120],"tags":[],"class_list":["post-3864","post","type-post","status-publish","format-standard","hentry","category-article-responses"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/peZu3S-10k","jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/posts\/3864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/comments?post=3864"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/posts\/3864\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/media?parent=3864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/categories?post=3864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/ilj\/wp-json\/wp\/v2\/tags?post=3864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}