The Brave New (American) World of International Investment Law: Substantive Investment Protection Standards in Mega-Regionals
| Author | Stephan W. Schill, Heather L. Bray |
| Position | Professor of International and Economic Law and Governance at the University of Amsterdam/Researcher and PhD Candidate at the University of Amsterdam; Barrister and Solicitor of the Law Society of Upper Canada; LLB (University of New Brunswick 2010); LLM (Western University 2011) |
| Pages | 419-448 |
The Brave New (americaN) world of iNTerNaTioNal
iNvesTmeNT law: suBsTaNTive iNvesTmeNT ProTecTioN
sTaNdards iN mega-regioNals
Stephan W. Schill* & Heather L. Bray**
University of Amsterdam, The Netherlands
ABSTRACT
Mega-Regionals are transforming and shaping the future of international investment
law, concerning both the settlement of investment disputes and the substantive
disciplines governing investor-state relations. Focusing on the latter, the present
article shows how Mega-Regionals depart from the so far dominant European
model of investment protection by going beyond crudely worded post-establishment
protections for foreign investment. Instead, Mega-Regionals pursue the twin policy
goals of investment liberalization through greater market access commitments and
strengthening state control by ensuring host governments sufcient space to regulate
in the public interest. In light of these policy goals, and considering the deeper reasons
for structural changes to the investment rules in Mega-Regionals, the article argues
that the models and conceptual foundations of Mega-Regionals build on prototypes rst
developed in the context of U.S. and NAFTA investment practices. This suggests that the
future of international investment law will be shaped to a considerable extent against
the background of U.S. experiences, rather than be forged anew by the mechanics of
international diplomacy and negotiation.
Br. J. Am. Leg. Studies 5 (2016), DOI: 10.1515/bjals-2016-0015
© 2016 Stephan W. Schill, Heather L. Bray, published by De Gruyter Open.
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.
* Professor of International and Economic Law and Governance at the University of Amsterdam;
Member of the List of Conciliators of the International Centre for Settlement of Investment
Disputes; German Rechtsanwalt and Attorney-at-Law (New York); Dr iur (Frankfurt am Main
2008); LLM (NYU 2006); LLM (Augsburg 2002). He can be reached at schill@uva.nl.
** Researcher and PhD Candidate at the University of Amsterdam; Barrister and Solicitor of the
Law Society of Upper Canada; LLB (University of New Brunswick 2010); LLM (Western
University 2011). She can be reached at heather@young-bray.ca.
The research leading to this article has received funding from the European Research
Council (ERC) under the ERC Grant Agreement N° 313355, as part of the research project
on ‘Transnational Private-Public Arbitration as Global Regulatory Governance: Charting
and Codifying the Lex Mercatoria Publica’ (LexMercPub) carried out at the University
of Amsterdam. The article is a revised and expanded version of a paper presented at the
conference “Mega-Regionals and the Future of International Trade and Investment Law”,
which was organized on 23 and 24 October 2014 in Dresden, Germany by the Research
Centre for International Economic Law at the University of Dresden and the afliated
research project “Global TranSAXion”. The article will also appear in mega-regioNal Trade
agreemeNTs aNd The fuTure of iNTerNaTioNal Trade aNd iNvesTmeNT law (Thilo Rensmann
ed., 2017). It was nalized based on material available as of 30 June 2016.
5 Br. J. Am. Leg. Studies (2016)
CONTENTS
i. The adveNT of mega-regioNals: whose Brave New world? ...........421
ii. iNvesTmeNT liBeralizaTioN Through mega-regioNals ………….....425
A. Non-Discriminatory Market-Access …………........................….426
B. Performance Requirements ………………………………………427
C. Limitations on Investment Liberalization …………………………428
iii. sTreNgTheNiNg sTaTe coNTrol Through mega-regioNals ...............429
A. Limiting the Scope of Application of Investment
Protection Standards ....................................................................429
B. Reformulation of Substantive Standards of Treatment ….......….433
C. Institutional Safeguards ……………………...........................….439
iv. The imPacT of mega-regioNals oN iNTerNaTioNal iNvesTmeNT law.........440
A. Fusing Mega-Trends in International Investment Law …............441
B. Structural Differences Between Mega-Regionals and
Traditional BITs ...........................................................................443
v. coNcludiNg remarks .....................................................................…447
420
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