The Evolution of Foreign Investment Regulation, Treaties and Investor-State Arbitration in Australia

Abstract

This paper outlines the historical evolution of Australia’s foreign direct investment (FDI) regulation generally, under national law and more recently bilateral investment treaties (BITs) or investment chapters of free trade agreements (FTAs). This sets the stage for closer analysis of the policy and politics in Australia over treaty-based investor-state dispute settlement (ISDS), particularly the binding arbitration mechanism since 2010. The paper concludes by highlighting some key contrasts with ISDS debates in New Zealand, a close trading and investment partner. It has retained more bipartisan support for ISDS in recent years, and FTAs generally, despite emergent concerns in the context of the Korea and Trans-Pacific Partnership FTAs.

Keywords: Free trade agreements, international economic law, investor-state dispute settlement (ISDS), arbitration, foreign direct investment (FDI) regulation, Commonwealth law, comparative law, Australia, New Zealand, dispute resolution, law reform process

JEL Classification: K10, K30, K33