From Protection to Facilitation Agreements: Contributions of The Pan-African Investment Code, the Brazilian Model, and the New Regional and Multilateral Foreign Investments Agreements
Published 27 June 2022
(Minor revisions 30/06/2022) International investment law is historically built to protect foreign investments against the domestic measures of host states. Since the post-WW2 era, protective mechanisms have been traditionally embedded in bilateral investment treaties (BITs). However, contemporary discussion about the international investment system revolves around the necessity to apply more balanced rules between investors and states, bringing new models of regional and bilateral agreements on investments, encompassing broader provisions to protect the public interest and recognising the unequal structures of foreign investment rules, according to the Third World Approach to International Law (TWAIL). Since the beginning of the 21st century, the emerging countries have been changing the framework of the global economy. Following the TWAIL approach, this paper investigates the differences between investment protection and facilitation displayed in new agreements involving emerging and developing countries. This work analyses the concept and the critique of the traditional investment protection agreements and the lack of correlation between BITs and FDI. Considering the TWAIL approach, it juxtaposes several examples of investment protection agreements such as the Pan-African Investment Code (PAIC) and new Pacific-Asian regional agreements (RCEP and CPTTP) against facilitation agreements such as the Brazilian Cooperation and Facilitation Investment Agreement (CFIA) and the discussion about a multilateral investment facilitation treaty at the World Trade Organization (WTO).
This paper is divided into four substantial parts. After the introduction in Section 1, Section 2 is dedicated to conceptualising investment protection and facilitation, in bilateral and regional agreements. Section 3 analyses investment protection treaties: PAIC, RCEP and CPTTP, the CFIA, and the current discussions for a WTO multilateral agreement on investment facilitation. Section 4 concludes the paper that there are new alternatives like facilitation investment agreements. However, the investment facilitation model neither solves most of the critique of the existing system nor converges all emerging countries' positions on investment regulation, considering that China and others have embraced the ISDS and BIT models.
This paper will be part of the second TDM Special Issue on "The African Continental Free Trade Agreement (AfCFTA)". More information here www.transnational-dispute-management.com/news.asp?key=1809