Multilateral Investment Agreement Define
If you are considering investing in foreign markets, it is essential to quickly consider protective measures under bilateral investment treaties (BITs) and multilateral investment treaties (IMTs). In the past, BITs were seen as created by the West to protect investments in emerging markets, but this is no longer the case. There are a number of cases where intracontinental battles are taking place and Western countries have been pursued by emerging market investors. The number of bilateral investment treaties grew rapidly in the 1990s, as countries and investors sought to further regulate the security, security and mobility of their investments after it became clear that the Agreement on Trade-Related Investment Measures (TRIMS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Uruguay Round General Agreement on Trade in Services (GATS). were only part of the Investment concerns were dispelled and did not provide enough guidance. Security for investors or strict controls by host governments to regulate multinational corporations. [6] In addition to these instruments, the World Bank adopted guidelines for the treatment of foreign direct investment in 1992. [7] In 1994, the Energy Charter Treaty provided an example of a multilateral investment agreement, albeit limited to the energy sector. “Performance requirements” typically distort the trading and investment decisions an investor would otherwise make in an open market. For this reason, a provision is negotiated in the MAI that restricts the use of certain listed performance requirements.
Such provisions are not uncommon. In fact, the text under negotiation is similar to the wording of NAFTA. Restrictions on the use of performance requirements are standardized in U.S. bilateral investment treaties. They are also included in the Agreement on Trade-Related Investment Measures negotiated under the Uruguay Round agreements establishing the WTO. The question for negotiators when considering the substantial effectiveness of the protection of investment agreements is the extent to which the system of protection under investment agreements has proven its worth in practice. Today, there are more than 3,000 international investment treaties, 2,000 of which are BITs that protect the investments of “nationals” of the home State in the territory of host States. Similar safeguards also exist under multilateral investment treaties, which provide rights for foreign investment within a network of participating host countries. Some multilateral treaties cover a wide range of topics, but usually include a chapter on investment. Examples include NAFTA (North American Free Trade Agreement), the Energy Charter Treaty and the upcoming much-debated Transatlantic Trade and Investment Partnership (TTIP) agreement (see Section VI below). Recent case analyses suggest that investors have gained about 30% of reported cases against states in investment treaty arbitration proceedings, and 30% have resulted in an agreement. Where the relevant treaty provides for arbitration before ICSID and the host State is dependent on assistance from the World Bank, the host State has a greater incentive to comply with an ICSID award.
If you have any questions about structuring investment agreements, a possible claim under an investment agreement, or the latest developments in TTIP, please contact Gibson Dunn`s lawyer, with whom you usually work, or one of the lawyers listed below. We will be happy to help you. The scope of safeguard measures under BITs and TATs is potentially broad and should therefore be assessed on a case-by-case basis before disregarding the possibility of a remedy for investments. For example, expropriation rights may apply if a State engages in intrusive or “creeping” acts that cumulatively, but not individually, deprive the investment of its economic value or remove control from the foreign investor. ACCORDING TO SOME TREATIES, FET protection may extend to subsequent measures taken by the State, e.B legislative or regulatory changes, withdrawal of essential licences, introduction of new customs duties or export quotas or similar. On the 25th. In May 1998, the Montreal Conference on Globalized Economies was blocked without violence for five hours by hundreds of activists as part of the so-called SalAMI operation,[28] based on the French acronym for the proposed agreement, AMI, which referred not only to the sausage, but also to a “dirty friend.” Operation SalAMI called on Canada to withdraw from the MAI negotiations. The presence at the conference of a key player in the MAI, Donald Johnston (OECD Secretary-General), helped guide the action, one of the three most important anti-AMI events in the world. These mobilizations at the international level actually led to the suspension of the agreement. The award-winning documentary Pressure Point: Inside the Montreal Blockade recounts the drama of this action, in which 100 people were arrested. [29] According to Sergio Marchi, a supporter of the MAI, who was Canada`s Minister of International Trade at the time, one of the main objectives of the agreement was to eliminate the “mosaic” of investment rules enshrined in the more than 1300 bilateral investment treaties of the time. Contrary to many critics, he argued that the MAI would help prevent a “race to the bottom” that would undermine the high standards of Canadian regulation.
[9] Specifically, the agreement would be as follows: The MAI can be a positive force for environmental and occupational health and safety. The United States has proposed a number of provisions to promote environmental protection and compliance with core labour standards. These provisions are intended to protect the ability of States to enact and implement laws and regulations to achieve these objectives. The MAI would not undermine a government`s power to regulate in general, not even to protect the health, safety of workers and the environment. We are also looking for specific language that would allow any Party, including the United States, to request consultations with any other AMI Party that is supposed to lower core labour, environmental, health or safety standards in order to attract investment. One of the main objectives of the MAI is to prevent governments from discriminating against foreign investors on the basis of their nationality (subject to the exceptions in the annex that each country imposes in order to be able to differentiate by nationality in sensitive sectors). This will not affect their ability to maintain, establish or enforce labour or environmental standards, regardless of the level a country sets for them. In fact, countries negotiating the MAI are currently considering provisions to strengthen their commitment to maintaining high labour and environmental standards and preventing some from lowering its standards to attract investment. France`s withdrawal follows the examination of a report on the negotiations prepared by a French MEP, Catherine Lalumière.
Upon receipt of this report, Prime Minister Lionel Jospin addressed the National Assembly on 10 October 1998 and announced his decision to withdraw. He said the Lalumière report had identified a number of fundamental problems with the agreement, particularly with regard to issues of national sovereignty. Mrs. Lalumière had also concluded that so many reserves would be included in the agreement that the value for French investors was limited. M. Jospin noted that in February 1998, the French government identified respect for cultural differences as a precondition for French support for the agreement. [34] In particular, he expressed concern that the French film industry needed protection against U.S. imports. [35] A controversial area related to TTIP is the inclusion of investor-state dispute settlement (ISDS) provisions. Given the high visibility of the TTIP negotiations, the ISDS provisions, which are typical of the several thousand existing investment agreements, were examined more closely. Some deal in particular with the ability of foreign investors to assert claims directly against States before private international arbitral tribunals, as opposed to State-sponsored judicial bodies. .
