The New EU Investment Treaties: Convergence towards the NAFTA Model as the New Plurilateral Model BIT Text?

Nikos Lavranos

European University Institute (EUI)

March 29, 2013


Abstract:     
The EU is about to conclude an FTA with Canada (CETA) which includes an investment chapter. A similar free trade agreement (FTA) will soon be concluded by the EU with Singapore and India. Moreover, the EU has obtained a negotiation mandate to conclude an FTA with Japan; very soon FTA with the US and China will follow suit. The draft text of CETA and the one with Singapore largely follow the North American Free Trade Agreement (NAFTA) and the 2012 US model bilateral investment treaty (BIT) text. It is safe to assume that this will also be the case with regard to the FTAs with Japan, US, India and China. Accordingly, the NAFTA model will have succeeded in being globally accepted and adopted by the most important economies of the world. Thus, the approach of limiting investment protection by applying the minimum standard of customary international law, using carve-outs and exceptions for specific sectors, increasing “policy space” by allowing indirect expropriation for public policy reasons without compensation, using qualified national treatment and most-favourite nation treatment etc. will have gained general acceptance on a global level.

Considering that most, if not all, EU Member States have based their investment policy on the “Dutch gold standard” BITs, the fact that the EU is adopting the NAFTA model is a very significant change. Accordingly, the main question that will be discussed in this policy brief is whether this move could potentially put the EU in the role of creating de facto a Plurilateral Model Investment Treaty, which would encompass the EU, Canada, the US, Japan, India, China and Singapore.
Number of Pages in PDF File: 6
Keywords: EU Investment Treaties, NAFTA, CETA, Policy Space, Dutch Gold Standard

Full text available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2241455