Models for Investment Treaties in the Asian Region: An Underview

Abstract

Many similarities and occasional differences are evident in New Zealand (as explained in Part 2) and Australia (Part 3) concerning their laws screening foreign direct investment (FDI) and current approaches towards investment treaties, including the now politically sensitive issue of investor-state dispute settlement (ISDS). These closely integrated countries may collectively be considered a ‘middle power’ able to influence the future trajectory of treaty negotiation and drafting in the wider Asian region, as part of its growing influence on international investment law more generally. To further tease out such potential, this paper therefore compares key areas of three existing key treaties already signed (the bilateral CER Protocol, their treaty with ASEAN, and the Trans-Pacific Partnership agreement: Part 4), as well as apparent positions set forth by Australia and New Zealand in a leaked investment chapter for the Regional Comprehensive Economic Partnership (RCEP or ‘ASEAN 6’ agreement: Part 5). Given the concerns about US-style treaty drafting displayed recently by Indonesia and India, major economies still negotiating RCEP with New Zealand and Australia (as well as bilateral agreements with the latter), we also consider the scope to promote more pro-state provisions regarding both substantive commitments and procedures such as ISDS, which characterise contemporary preferences of the European Union (Part 6). We conclude that this transition is likely not only given the evolving preferences of counterparties and local politics in New Zealand and (especially) Australia, but also because of various policy arguments for dialing back treaty commitments to foreign investors – albeit without eschewing them altogether.

Keywords: Foreign Direct Investment (FDI), Investment Law, International Economic Law, Investor-State Dispute Settlement (ISDS), Arbitration, Australia, New Zealand, Asian Law

JEL Classification: K10, K30, K33