Renouncing Investor-State Dispute Settlement in Australia, Then New Zealand: Déjà Vu

Abstract

New Zealand’s newly elected Labour coalition government announced in October 2017 that it would not agree to investor-state dispute settlement (ISDS) provisions in future trade and investment agreements, and would try to amend them in the Trans-Pacific Partnership (TPP) agreement. This has triggered a resurgence of newspaper coverage of ISDS, in contrast to the diminishing coverage in Australia (Part 1). The policy shift leaves a strong sense of déjà vu, namely the Gillard Government Trade Policy Statement of 2011 that eschewed ISDS for Australia until its general election of 2013, and New Zealand’s stance complicates negotiations for the (ASEAN 6) Regional Comprehensive Economic Partnership (Part 2). Yet other treaties have recently been signed, amended or negotiated by one or both countries, including one jointly with Pacific Island countries excluding ISDS that has been little reported (Part 3). There has also been very little reporting about ISDS case developments related to Australia, even two inbound claims filed or threatened in addition to the infamous Philip Morris Asia case, and not to mention several outbound ISDS claims that raise interesting issues for treaty negotiators (Part 4). There should be a fuller review and discussion about how each country should approach investment treaty negotiation and dispute settlement mechanisms, especially jointly (Part 5). This includes promoting the alternative of an investment court (or at least some of its core features), as favoured by the European Union and now being slowly investigated along with ISDS reforms through the United Nations. A version of the first half of this paper is forthcoming in the Yearbook on International Investment Law and Policy; a version of the second half is forthcoming in a special issue of the University of Western Australia Law Review.

A version of the first half of this paper is forthcoming in the "Yearbook on International Investment Law and Policy"; a version of the second half is forthcoming in a special issue of the "University of Western Australia Law Review".

Keywords: foreign investment, international economic law, investment law, dispute resolution, arbitration, investor-state dispute settlement (ISDS), Australia, New Zealand, Asia-Pacific

JEL Classification: K10, K30