The Mercosur Protocol on Investment Cooperation and Facilitation: Regionalizing an Innovative Approach to Investment Agreements

EJIL Talk!, European Journal of International Law, September 2017

4 Pages Posted: 3 Oct 2017 Last revised: 15 Aug 2018

See all articles by Facundo Pérez-Aznar

Facundo Pérez-Aznar

Geneva Center for International Dispute Settlement (CIDS); University of Buenos Aires (UBA) - Faculty of Law

Henrique Choer Moraes

Embassy of Brazil in New Zealand ; KU Leuven

Date Written: September 12, 2017

Abstract

The States Parties of the MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) signed in April 2017 the Protocol on Investment Cooperation and Facilitation (“MERCOSUR Protocol”). As discussed in this post, the Protocol draws significantly on the Brazilian model investment agreement (the Agreement on Cooperation and Facilitation of Investments – ACFI), which stands out for departing from the traditional design of Bilateral Investment Treaties (BITs), particularly – but not only – by excluding the possibility of investor-State dispute settlement (ISDS). The emergence of the MERCOSUR Protocol has implications at the level of investment policy, as it represents a step towards the regionalization of the Brazilian model. It reflects the attempt to include in a single document the realities of four countries with important political, economic and investment policy differences, as expressed by the varying trajectories of Argentina and Brazil in the investment area. It also raises interesting questions from an international law perspective. It highlights the legal challenges faced by Brazil, which not only joined the network of international investment agreements (IIAs) as a late-comer but also opted for embracing a particular approach to investment treaties. Accordingly, aside from provisions that innovate in investment law-making, the MERCOSUR Protocol incorporates provisions whose intention seems to be to insulate Brazil from applying protection standards often found in the over 3,000 treaties that now comprise the network of BITs, but which have been deliberately absent in the ACFI.

Keywords: International Investment Law, Mercosur, Investment Agreements

Suggested Citation

Pérez-Aznar, Facundo and Choer Moraes, Henrique, The Mercosur Protocol on Investment Cooperation and Facilitation: Regionalizing an Innovative Approach to Investment Agreements (September 12, 2017). EJIL Talk!, European Journal of International Law, September 2017, Available at SSRN: https://ssrn.com/abstract=3045944

Facundo Pérez-Aznar

Geneva Center for International Dispute Settlement (CIDS) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

University of Buenos Aires (UBA) - Faculty of Law ( email )

Av. Figueroa Alcorta 2263
Buenos Aires, C1425CKB
Argentina

Henrique Choer Moraes (Contact Author)

Embassy of Brazil in New Zealand ( email )

Level 13, 10 Customhouse Quay
Wellington, 6011
New Zealand

KU Leuven ( email )

Belgium

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