Negotiating From a Model BIT

Abstract

Most States today have significant experience negotiating bilateral investment treaties (BITs). States at all levels of economic development already have concluded nearly 3,000 BITs, in addition to some 400 other international investment agreements (IIAs). Although the pace of negotiations has slowed in recent years, States continue to conclude a significant number of BITs and other IIAs. Despite their extensive experience over many years, however, States have approached their BIT negotiations differently. Some States have negotiated from their own model texts, whether formal and public or informal and non-public. Other States have felt no need to develop a model BIT, or have lacked capacity to do so. These States may have negotiated from their existing BITs or from a template developed by a negotiating partner or a third party, such as another State, an NGO, or an international organization. This chapter addresses four questions arising from this disparity in negotiating practice: (1) why do States develop model BITs; (2) what factors influence the development of such models; (3) how do States negotiate BITs from a model; and (4) given that some States negotiate from well-developed models and others have no models at all, what effect does this asymmetry have on negotiated BITs?

Keywords: Model BIT, bilateral investment treaty, treaty negotiation, ISDS

JEL Classification: K33