Sustainable Development Provisions in International Trade Treaties
Sustainable Development Provisions in International Trade Treaties
What Lessons for International Investment Agreements?
Critics worry that investment protection provisions in bilateral investment treaties (BITs) restrict States’ ability to ensure that foreign investment contributes to sustainable development. An increasing number of BITS, however, seek to preserve State flexibility to regulate and achieve sustainable development by, among other things, (i) recognizing sustainable development in treaty preambles, (ii) providing that States can act to protect labour rights and the environment without having to compensate affected investors for indirect expropriation, and (iii) creating exceptions for environmental measures. Preferential Trade and Investment Treaties (PTIA) typically incorporate all of these approaches, though often in a stronger form, as well as other kind of sustainable development provisions. Competition by host States for investment and the limited scope of BIT negotiations continue to discourage the adoption of sustainable development provisions in BITs. But stronger factors encourage the adoption of some PTIA provisions. Growing dissatisfaction with traditional BITs, investor–State arbitration claims against traditional capital-exporting States and the negotiation of BITs between countries with significant two-way investment flows, all encourage States to better balance investor protection with the promotion of sustainable development.
Keywords: Bilateral, trade, investment, treaty, sustainable development, labour, environment
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