The Evolution of National Security at the Interface between Domestic and International Investment Law and Policy: The Role of China

Forthcoming, Journal of World Investment & Trade

U of Melbourne Legal Studies Research Paper No. 851

50 Pages Posted: 15 Jul 2019 Last revised: 22 Oct 2019

See all articles by Lizzie Knight

Lizzie Knight

Corrs Chambers Westgarth

Tania Voon

University of Melbourne - Law School

Date Written: September 26, 2018

Abstract

As China’s economy grows and the global economy is increasingly digitalised, the concept of national security is taking on increasing significance. Contrary to its quiet history, the security exception has now been invoked by different parties in ongoing disputes at the World Trade Organization. Similar exceptions exist in many international investment agreements and lie at the core of domestic jurisdictions’ regulatory frameworks for reviewing foreign investments. At the domestic level, these reviews have shifted to focus particularly on China and on a new category of ‘data’. Continued expansion of the meaning of security as a basis for rejecting foreign investment applications poses a threat to the benefits of economic integration, while allowing international tribunals to review these decisions by ruling on the meaning of this exception is likely to be counterproductive. Alternatives exist at the domestic and international levels. Domestically, a focus on evidence-based assessments and the imposition of behavioural or structural conditions as an alternative to rejecting foreign investment applications may help to mitigate security concerns. International guidelines and principles are already established to assist investors and investment agencies in this regard. Further rule reform at the international level may allow a more specific focus on agreed solutions to data concerns in place of a general acceptance of security as a catch-all response to perceived threats of foreign investment.

Keywords: China; data; international law; investment law; national security; trade; WTO

JEL Classification: K33

Suggested Citation

Knight, Lizzie and Voon, Tania, The Evolution of National Security at the Interface between Domestic and International Investment Law and Policy: The Role of China (September 26, 2018). Forthcoming, Journal of World Investment & Trade, U of Melbourne Legal Studies Research Paper No. 851, Available at SSRN: https://ssrn.com/abstract=3419308

Lizzie Knight

Corrs Chambers Westgarth ( email )

Australia

Tania Voon (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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