Article: Converging Towards NAFTA: An Analysis of FTA Investment Chapters in the European Union and the United States

36 Pages Posted: 9 Oct 2014

See all articles by Filippo Fontanelli

Filippo Fontanelli

University of Edinburgh - School of Law

Giuseppe Bianco

University of Oslo; Université Paris 1 Panthéon-Sorbonne

Date Written: April 1, 2014


The present study is concerned with the evolution of investment chapters of Free Trade Agreements (FTAs). Our purpose is to observe the structure and recurrent patterns of the normative content of these chapters in order to ascertain and analyse certain trends. The sample of agreements reviewed is limited to the investment agreements concluded (or about to be concluded, when there is sufficient information) by the two major importers and exporters of Foreign Direct Investment (FDI) — the United States and the European Union.

After an overview illustrating the history and layout of the EU and U.S. systems of investment protection (Part I), we provide a breakdown of the provisions that create a gulf between the two models (Part II). In Part III, we describe and analyse the current impasse in the European Union’s newly centralised management of investment policies. Our central claim is then illustrated in Part IV, where we argue that the U.S. (NAFTA-like) template is likely to prevail over the European one, in the long run, because it fills the gaps in incomplete treaty regimes like those recurrent in European Bilateral Investment Treaties (BITs). The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union seems to confirm this trend. In light of these remarks, we conclude that, in the future, pluri- and multilateral negotiations will increasingly lean towards the NAFTA model and gradually distance themselves from the European BIT standard.

Keywords: European Union, CETA, BITs, incomplete contracting, NAFTA, free trade agreements

Suggested Citation

Fontanelli, Filippo and Bianco, Giuseppe, Article: Converging Towards NAFTA: An Analysis of FTA Investment Chapters in the European Union and the United States (April 1, 2014). Stanford Journal of International Law Vol. 50, No. 2, Available at SSRN: or

Filippo Fontanelli (Contact Author)

University of Edinburgh - School of Law ( email )

Old College
South Bridge
Edinburgh, EH8 9YL
United Kingdom

Giuseppe Bianco

University of Oslo ( email )

Karl Johansgate 47
Oslo, 0162


Université Paris 1 Panthéon-Sorbonne ( email )

12 Place du Panthéon
Paris, 75005

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