Marc Bungenberg and Catharine Titi wrote an interesting contribution in UNCTAD’s Investment Policy Hub: The prospective EU-China investment agreement and the new potential for multilateralism in international investment law.
UNCTAD asked me to comment, which I did:
Marc Bungenberg and Catharine Titi are right in their assessment that the EU-China investment treaty’s importance extents well beyond the bilateral relationship itself. In my view, a future European-Chinese investment treaty will form part of an emerging power triangle between the EU, China and the United States in which the rules of global investment will be redefined. We may in fact see the introduction of de facto multilateral investment disciplines through the backdoor. I will not deal with the question whether multilateral investment rules are needed and desirable (I have dealt with these questions in this piece). However, in terms of the processes that may lead to a de facto multilateralisation of investment rule making these developments may indeed be problematic. After all, the EU and the US are traditional capital exporting countries and China is about to join this club. Smaller and poorer developing countries – that may have a different view on the level of investment protection and market access offered to foreign investors – are not sitting at the negotiation table. In order to take their specific needs into account we need an accompanying “consensus-building process” as proposed by Karl Sauvant and Federico Ortino.