The ASEAN Comprehensive Investment Agreement and ‘ASEAN Plus’ – The Australia-New Zealand Free Trade Area (AANZFTA) and the PRC-ASEAN Investment Agreement

Abstract

The Association of South-East Asian Nations (ASEAN) was founded in 1967 partly for political and security reasons, but its main purposes are to accelerate economic growth, social progress and cultural development. Over time, the aim of expanding trade has also come to encompass the objective of encouraging and increasing investment within the ASEAN region, and between the region and other countries around ASEAN. In 2009, the 10 ASEAN states signed the Comprehensive Investment Agreement, which creates a detailed framework for mutual investment within the ASEAN region and came into effect in 2012. ASEAN has also entered into a number of (“ASEAN”) free trade agreements with countries such as China, Australia-New Zealand, Japan, Korea and India, which refer to the liberalisation of mutual investment. It is also the centrepiece of the (“ASEAN 6”) Regional Comprehensive Economic Partnership agreement under negotiation since late 2012. This paper discusses the approach taken by ASEAN to investment and resolution of investment disputes, leading up to the Comprehensive Investment Agreement and the issues which this Agreement presents in relation to implementation. It assesses some commentators’ claims that some member states (and other parts of the Asian region) are still quite ambivalent about investment liberalisation and investor-State dispute settlement procedures. It then discusses the existing ASEAN economic cooperation treaties and their provisions in relation to investment, with a particular focus on AANZFTA. For example, it examines the exclusion of conditions covering Australia-New Zealand cross-investments and the question of dispute resolution, particularly in light of the (then) Gillard Government’s Trade Policy Statement announcement in April 2011 that changed Australia’s longstanding policy stance to eschew all forms of treaty-based investor-State dispute settlement in future treaties.

The Chapter also touches on a related important development affecting ASEAN and regional economic integration: the Trans-Pacific Partnership Agreement (“TPPA”). The TPPA was signed in 2005 by Singapore, Brunei, New Zealand and Chile; but Vietnam, Malaysia, Australia, Peru, the USA, Mexico, Canada and Japan are now negotiating accession. It too is premised on the addition of an Investment Chapter, with investor-State arbitration provisions also proving to be contentious.

Keywords: International law, International investment law, Asian law, Comparative law, Dispute resolution, International arbitration, Trade and investment treaties, Free Trade Agreements (FTAs)

JEL Classification: K10, K30, K33