Regulatory Space in International Trade Law and International Investment Law

Abstract

Domestic regulatory decisions involving matters of human health or the environment are increasingly coming under scrutiny by international courts and tribunals. One of the latest examples concerns an Australian law that mandates the plain packaging of cigarettes and which is being challenged in international investment law and international trade law.

Both of these fields are closely related, yet despite the use of similar rules differ in important respects. This article analyzes the extent of the regulatory space that is afforded to states and WTO members in the international investment and international trade regimes. It does so by comparing the jurisprudence of investment tribunals regarding regulatory expropriations and the jurisprudence of the WTO dispute settlement organs in cases concerning human, animal and plant life or health as well as international standards.

The article suggests that international investment law and international trade law offer insights for one another. But it also finds that international trade law has been more adept at incorporating concerns such as human health or the environment as a countervailing force to the prevailing paradigm of trade liberalization. International investment law is currently undergoing a similar discourse that has shaped international trade law shortly after the inception of the WTO in 1995. That discussion is carried out on the basis of different text and context, a different set of institutions and different epistemic communities. Despite these differences, there are growing signs of convergence of how much regulatory space is afforded in international trade and investment law, respectively.

Keywords: international trade law, international investment law, regulation, WTO, investment protection