The Most Favoured Nation Standard and Foreign Investment: An Uneasy Fit?

Posted: 27 May 2005

See all articles by Jürgen Kurtz

Jürgen Kurtz

University of Melbourne - Law School

Abstract

This paper examines recent arbitral jurisprudence applying the most-favoured-nation treatment (MFN) standard in various investment treaties. It does so by firstly comparing the strong economic and political case for the use of MFN against trade discrimination with its more recent transport into the nascent international law of investment. The paper puts forward three fundamental historical, normative and systemic differences between MFN as it appears in the WTO and investment treaties. The underlying thesis is that these differences translate into a far greater potential for MFN in investment treaties to impinge on the regulatory autonomy of host states. The paper concludes by offering suggestions on interpretative mechanisms through which to balance an ordinary reading of the broad nature of most MFN provisions whilst guarding against undue intrusion into regulatory autonomy.

Keywords: most favoured nation,foreign investment,trade descrimation,regulatory autonomy

JEL Classification: F13, K20, K00

Suggested Citation

Kurtz, Jürgen, The Most Favoured Nation Standard and Foreign Investment: An Uneasy Fit?. Journal of World Investment and Trade, Vol. 5, No. 6, pp. 861-886, 2004. Available at SSRN: https://ssrn.com/abstract=730225

Jürgen Kurtz (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
613 8344 4770 (Phone)
613 8344 9971 (Fax)

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