Key Message

Since the early 1990s, countries across the globe have concluded investment treaties at a dizzying pace. In recent years the number of newly concluded bilateral investment treaties has been decreasing, but the share of free trade agreements with investment protection provisions has continued to grow, with several high-profile negotiations currently ongoing. IISD monitors the negotiation and conclusion of treaties as well as the revision of country's model agreements. It provides analyses of processes and content along the way and is actively engaged in addressing the sustainable development implications of the investor–state arbitrations that arise from this web of over 3,000 investment treaties.

Investment Treaties

The international investment framework consists today of a web of roughly 3,000 investment treaties, including bilateral investment treaties between two states, regional agreements, and investment protection provisions in free trade agreements between two or more countries. A key driver of these instruments has historically been the desire of developed, capital-exporting states to ensure that their nationals are financially and legally protected when investing in developing, capital-importing states. Consequently, the majority of investment treaties are between developed countries and developing countries or economies in transition, though this is slowly changing.

These treaties are not mere friendly diplomatic instruments, as some countries had first expected, but are actual treaties setting out hard legal obligations for the state hosting the investment and enforceable rights for the foreign investor.
The majority of the investment protection treaties still include potentially broad and vague standards, providing little legal certainty and allowing tribunals to interpret the standard in ways that significantly limit the governments’ regulatory powers.

IISD monitors the negotiation of investment treaties and the disputes initiated thereunder. As part of its capacity building activities, it works with developing country governments to develop their policies on investment treaties in ways that fulfill their sustainable development goals and limit negative impacts of international investment treaties on governmental law and policy making. IISD also works with parliaments and civil society to foster and deepen their understanding of the investment treaty regimes.