The new year saw the entry into force of two new trade deals involving Australia, namely those involving Peru and Hong Kong. The two agreements both feature investment chapters and were ratified in the Australian legislature in late December, together with a separate accord involving Indonesia.
In the case of the Australia–Hong Kong FTA, the new agreement terminates the long-standing BIT between the two partners, which dates back to 1993. The investment chapter includes an ISDS mechanism, with some measures excluded from challenge, such as those relating to certain public health measures (including tobacco control) along with investment screening decisions made under Australia’s Foreign Investment Review Board.
A summary of the agreement’s investment outcomes also notes that a provision was included to protect the states’ right to regulate in areas relating to the arts and certain public services, along with Indigenous traditional cultural expressions.
The Australia–Peru FTA also includes an investment chapter and ISDS mechanism, with similar phrasing on the right to regulate in the public interest. ISDS does not apply to certain social services, creative arts, foreign investment screening decisions and Indigenous traditional cultural expressions.
Another notable development is the Australian legislature’s ratification of the Comprehensive Economic Partnership Agreement (CEPA) with Indonesia, the most populous economy in Southeast Asia. The agreement includes an investment chapter with an ISDS mechanism, and again includes references to certain aspects of public health, tobacco control and foreign investment screening as being among the areas excluded from ISDS. The CEPA is still pending ratification in Indonesia before it can enter into force.