The Multilateralization of International Investment Law

104 Pages Posted: 21 Dec 2009 Last revised: 9 Feb 2010

See all articles by Rafael Leal-Arcas

Rafael Leal-Arcas

Queen Mary University of London - School of Law

Date Written: December 16, 2009


This article explores whether a multilateral investment treaty is necessary and possible in the framework of foreign direct investment (FDI) law or whether the current multifaceted and multilayered system of bilateral and regional investment agreements should be retained. This article aims to study existing investment regimes with a view toward creating a multilateral investment framework. This goal, however, does not suggest that current bilateral and regional investment regimes should be replaced or that the existing regimes are inadequate. The article analyzes foreign direct investment from an economic, development, and political perspective. The article then reviews the chronological evolution of FDI regulation, followed by an overview of the current principles and rules of FDI. As a necessary next step, the article examines the support for a multilateral investment framework. The main reasons behind such a framework are twofold: the current fragmented international investment regime may encourage regulatory competition among the various models of international investment agreements; and investor-state arbitration is causing issues of inconsistency of arbitral awards as well as forum shopping in dispute resolution. Finally, the article identifies policy considerations for a future multilateral investment framework. The article concludes that the World Trade Organization (WTO) has the opportunity here to incorporate years of experience of bilateral and regional investment agreements and develop a multilateral agreement for investment. Such an agreement in the WTO context would not replace current investment regulatory regimes, but could clarify the relationship among the General Agreement on Trade in Services, the Agreement on Trade-Related Investment Measures, and bilateral investment treaties.

Keywords: multilateral investment treaty, bilateral investment treaty, FDI law, regional investment agreements, WTO, forum shopping in dispute resolution, inconsistency of arbitral awards

JEL Classification: K33

Suggested Citation

Leal-Arcas, Rafael, The Multilateralization of International Investment Law (December 16, 2009). North Carolina Journal of International Law and Commercial Regulation, Vol. 35, No. 1, pp. 33-135, 2009; Queen Mary School of Law Legal Studies Research Paper No. 41/2010. Available at SSRN:

Rafael Leal-Arcas (Contact Author)

Queen Mary University of London - School of Law ( email )

Lincoln's Inn Fields
Holborn, London WC2A 3JB
United Kingdom


Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics