The Contribution of Free Trade Agreements and Bilateral Investment Treaties to a Sustainable Future

74 Pages Posted: 16 Dec 2019 Last revised: 4 Jun 2020

See all articles by Rafael Leal-Arcas

Rafael Leal-Arcas

Queen Mary University of London, School of Law

Marek Anderle

Queen Mary University of London

Filipa Santos

Queen Mary University of London

Luuk Uilenbroek

Queen Mary University of London

Hannah Schragmann

Copenhagen Business School - Department of International Business and Politics

Date Written: December 12, 2019

Abstract

We argue that international trade law may be the solution to decarbonize the economy and invest in renewable energy, but there must be effective measures agreed by the international community. That would require agreeing on preferential trade agreements (PTAs) with environmental and sustainable development chapters on a unilateral, bilateral, or plurilateral basis, as multilateral agreements have proven to be increasingly difficult to negotiate. This paper will assess the feasibility of including such chapters through an analysis of existing environmental and climate change-content in recent PTAs. Equally, recent developments in newer bilateral investment treaties (BITs) show that there is a positive shift towards explicit inclusion of sustainable development issues into their wording (e.g. states’ right to adopt sustainable development-oriented regulation). Reference to sustainable development issues may appear in different parts of a BIT, e.g. as a general objective of the treaty in a preamble, as a separate obligation of the state parties or investors, or as an exception to the substantive protection standards, such as prohibition of unlawful indirect expropriation. Specific position and wording of sustainable development provisions determine to what extent such provisions will be binding and enforceable against state parties. Certain BITs contain only a broad reference to sustainable development without clear practical consequences, while others list sustainable development obligations that may be enforced in practice, e.g. by means of state to state dispute settlement mechanism or, if such obligations are imposed on foreign investors, as a counterclaim brought by a host state against an investor. Finally, we analyze how efforts to modernize the Energy Charter Treaty may contribute to sustainable development.

Suggested Citation

Leal-Arcas, Rafael and Anderle, Marek and Santos, Filipa and Uilenbroek, Luuk and Schragmann, Hannah, The Contribution of Free Trade Agreements and Bilateral Investment Treaties to a Sustainable Future (December 12, 2019). Zeitschrift für Europarechtliche Studien – ZEuS, Vol. 23, Issue 1/2020, pp. 3-76., Available at SSRN: https://ssrn.com/abstract=3502978

Rafael Leal-Arcas (Contact Author)

Queen Mary University of London, School of Law ( email )

67-69
Lincoln's Inn Fields
Holborn, London WC2A 3JB
United Kingdom

HOME PAGE: http://www.ccls.qmul.ac.uk/staff/lealarcas.html

Marek Anderle

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Filipa Santos

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Luuk Uilenbroek

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Hannah Schragmann

Copenhagen Business School - Department of International Business and Politics

Denmark

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