WTO members involved in the “structured discussions” on investment facilitation met on several occasions during the first quarter of 2021. These meetings culminated with the circulation of the “Easter Text,” an important milestone in the talks that brings together several earlier drafts and texts in one document. This text will serve as the main basis for drafting any ultimate agreement on investment facilitation.
UNCITRAL WGIII Reconvenes to Discuss Work and Resourcing Plan; Civil society observers raise concerns
The UNCITRAL WGIII convened, with delegates able to attend virtually or in-person, from May 4–5, 2021 for the resumption of its 40th session. On the agenda was consideration of the draft work and resourcing plan.
Outlook for the EU-China Comprehensive Agreement on Investment Unclear, as EU Parliament Votes to Suspend Ratification Efforts
On May 20, 2021, the European Parliament voted to suspend ratification efforts of the “in principle” Comprehensive Agreement on Investment (CAI) with China.
As we reported, German-owned energy company Uniper put the Netherlands on notice of an investment dispute last year, following the announcement of the country’s plan to phase out coal-burning power plants by 2030. Alongside RWE, another German energy company, Uniper made good on that threat earlier this year; both companies initiated ICSID claims lodged under the ECT this spring.
On May 13, 2021, Canada announced that it had finalized its 2021 Model Foreign Investment Promotion and Protection Agreement (FIPA), which will replace the 2014 version. According to Global Affairs Canada, the agreement is the result of “extensive public consultations initiated in 2018 with a broad range of stakeholders, including from civil society and labour unions, legal experts, representatives of all sizes of Canadian business, representatives of provinces and territories, and Indigenous partners.”
Progress report on ECT modernization negotiations indicates familiar divisions among delegations as push for EU withdrawal grows
Following three negotiation rounds on ECT modernization last year, the most recent of which concluded on November 6, 2020, a leaked progress report from December 2020 suggests that state parties are still divided on key issues. This makes progress in negotiations, which require consensus from the national delegations, difficult to come by.
On December 30, 2020, after seven years of discussion, Brussels and Beijing announced the conclusion of the negotiations for an “in principle” Comprehensive Agreement on Investment (CAI) between China and the European Union.
French consortium kicks off an ICSID claim against Chile after USD 37 million loss due to COVID-19 Pandemic
On January 19, 2021, the main shareholders of a consortium controlling the billion-dollar concession for Santiago’s Arturo Merino Benítez international airport informed Chilean President Sebastián Piñera of their intention to initiate an ICSID claim. The investors claimed they had suffered losses as a consequence of measures taken in response to the COVID-19 pandemic.
The UNCITRAL Working Group III (WGIII) convened virtually from February 8 to 12 for its 40th session. During this session, the group’s deliberations focused on two main issues related to structural reform of ISDS: the selection and appointment of ISDS tribunal members in the context of a “Standing mechanism” or “Standing body” (A/CN.9/WG.III/WP.203) and an appellate mechanism (A/CN.9/WG.III/WP.202).
CETA Investment Court System advances toward implementation while Irish activists launch campaign opposing ratification
Four decisions adopted by Canada and the European Union on January 29 have moved the parties closer to implementing an Investment Court System (ICS) under the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The decisions on appeals, interpretation, code of conduct, and mediation were formally endorsed by CETA’s Joint Committee and Committee on Services and Investment (CSI) and will take effect once the dispute resolution provision of CETA comes into force.
The EU’s foreign investment screening mechanisms became operational on October 11, 2020. As we’ve reported, guidance on the screening mechanisms, which are implemented by individual member states, was released in March 2020 following the 2019 entry into force of the FDI Screening Regulation.
EC suggests withdrawal is a possibility as Energy Charter Treaty modernization negotiations continue
On December 2, 2020, in an answer to questions submitted by MEPs, the EC suggested that the EU could exit the ECT.
On November 15, 2020, 15 Asia-Pacific countries signed the Regional Comprehensive Economic Partnership (RCEP) nearly one year after negotiations came to a close.
On November 9, 2020, the Asian Academy of International Law hosted a virtual event on the use of mediation in investor–state dispute settlement. This event is one of several being organized by UNCITRAL in parallel to the formal meetings of the Working Group III on investor–state dispute settlement reform.
UNCTAD’s IIA Reform Accelerator launched in November 2020.
Negotiators working on multilateral reform of the ISDS system will reconvene on October 5 to 9, 2020, in Vienna for their 39th session. This session, which was originally to be held in March and April 2020, was rescheduled in light of the COVID-19 pandemic.
On July 31, 2020, the Cypriot parliament voted against the ratification of CETA, the trade deal between the EU and Canada.
The U.S. and Kenya formally launched negotiations on the US–Kenya FTA on July 8, 2020. If concluded, the agreement would be the first bilateral trade agreement between the U.S. and a sub-Saharan African state.
European Commission initiates infringement proceedings against the UK and Finland for failing to terminate intra-EU BITs
On May 14, 2020 the EC initiated infringement proceedings against the UK and Finland for failing to terminate the intra-EU BITs to which they are a party. Though the UK has formally left the European Union, EU law continues to apply to the UK during the transition period, which ends on December 31, 2020.
Following two years of “structured discussions,” the negotiations for a proposed WTO multilateral framework for investment facilitation (MFIF) are set to begin on September 24–25, 2020.
Negotiations for the Indonesia–EU FTA have been ongoing since 2016, with the ninth round taking place on June 15–26, 2020.
The government of India has recently enacted significant restrictions on inward FDI coming from its neighbours, in a move that seems calculated to target Chinese investment.
As we reported, the EC launched a consultation to clarify and supplement rules on cross-border investment within the EU in May 2020.
Latest round of talks on ECT modernization yields little progress on “modernization”; European officials call for removal of protection for fossil fuels and ISDS
Two rounds of the negotiations for the modernization of the ECT have been held over the past two months, from July 6 to 9 and September 8 to 11, 2020.
On May 26 2020, the EC launched a consultation to clarify and supplement rules on cross-border investment within the EU. According to the consultation document released by the EC, the EU currently faces a growing need for private investment – both for its efforts to mitigate climate change and remain competitive in an increasing digital […]
On March 25, 2020, the European Commission published a guidance for member states on FDI screening in the face of the COVID-19 pandemic, focusing on, but not limited to, health-related industries.
The director-general of the WTO, Roberto Azevêdo, announced on May 14, 2020, that he will be cutting his term short by one year and stepping down as of August 31. Azevêdo has served in the position since September 1, 2013, with his second term starting in 2017.
The EU released a proposal for the modernization of the ECT on May 27, 2020. This latest draft of the EU’s proposal includes changes to the treaty’s definition of investment, an affirmation of parties’ right to regulate, a narrower definition of FET, and reference to a multilateral investment court. The proposal also suggests several additional articles on sustainable development, frivolous claims, security for costs, interventions by third parties, third-party funding, and valuation of damages.
EU Member States Sign Agreement to Terminate Intra-EU BITs While German Investor Brings Claim Against the Netherlands Under the ECT
On May 5, 2020, 23 European Union member states* formally agreed to the termination of intra-EU BITs.
On April 24, 2020, USTR Robert Lighthizer announced that the USMCA would enter into force on July 1 of this year, one month later than was previously agreed upon.
The entry into force of the African Continental Free Trade Area (AfCFTA) has been delayed due to the Covid-19 pandemic, according to the Secretary General of the AfCFTA Secretariat, Wamkele Mene. The first phase of the agreement will now take effect by January 2021 at the earliest.
The 101 WTO members discussing a proposed multilateral framework on investment facilitation are now considering a new “consolidated text,” which is meant to be a stepping stone for formal negotiations once these begin.
January UNCITRAL session considers appellate mechanism, standing court, and arbitrator and adjudicator issues
Negotiators working on multilateral reform solutions to ISDS reconvened in Vienna in January 2020 to resume their 38th session, holding talks around the possibility of an appellate mechanism, the benefits and challenges of setting up a permanent court on investment issues, and the process around choosing arbitrators and adjudicators.
Los 99 miembros de la OMC participantes de los debates estructurados sobre un posible marco multilateral para la facilitación de las inversiones están preparándose para pasar al modo negociación desde marzo del 2020 en adelante, en un intento por anunciar un “resultado concreto” en la 12ª Conferencia Ministerial de la OMC a realizarse en Nur-Sultan, Kazakstán, en junio de 2020.
The negotiations for ECT modernization are now underway, with the first such meetings held in December 2019 and at least four other sessions planned over 2020.
The talks between China and the EU for a Comprehensive Agreement on Investment saw an important milestone in December 2019, as the two sides exchanged new market access offers. They had exchanged market access offers once previously, in July 2018.
The United States–Mexico–Canada Agreement (USMCA) has been ratified and signed into law in the United States, bringing the trade and investment deal one step closer to entry into force. Of the three countries involved, the only one that has not completed its ratification processes is Canada.
The United Kingdom’s exit from the EU formally took place on January 31, 2020, following years of talks and repeated extensions in the Brexit deadline. With the United Kingdom now in an 11-month transition period, questions remain over the shape of the country’s future trade and investment relationship with the EU and other partners, though some further indications of what this may entail are beginning to emerge.
El nuevo año es testigo de la entrada en vigor de dos nuevos acuerdos comerciales que involucran a Australia; a saber, Perú y Hong Kong. Ambos acuerdos contienen capítulos de inversión y fueron ratificados por la legislatura australiana a fines de diciembre, junto con otro acuerdo que involucra a Indonesia.
El Parlamento Europeo ha dado luz verde a los acuerdos de comercio e inversión del bloque de 27 naciones con Vietnam, luego de siete años de iniciadas las negociaciones formales.
A group of 20 civil society organizations and trade unions from the African continent have circulated a letter questioning the EU’s multilateral investment court (MIC) proposal in the context of the UNCITRAL Working Group III talks on multilateral ISDS reform and urging for a set of alternative proposals to advance instead.
From November 25 to 27, 2019, the Office of the UN High Commissioner for Human Rights hosted this year’s United Nations Forum on Business and Human Rights in Geneva, Switzerland.
The UNCTAD High-Level IIA Conference, held in Geneva, Switzerland, in November 2019 featured a session dedicated to investment facilitation and promotion.
On November 6, 2019, the Energy Charter Conference confirmed that it would hold the first session of its “Modernization Group” on December 12, 2019, kicking off the process to revise the decades-old ECT.
Leaders from 15 of the countries negotiating the Regional Comprehensive Economic Partnership (RCEP) announced on November 4, 2019, that they had clinched a deal that would govern trade and investment across a wide swath of the Asia–Pacific region.
The joint initiative being pursued by 92 WTO members on developing a multilateral framework on investment facilitation has reached a new phase, with various new participants involved and a push for significant progress ahead of a December stocktaking meeting.
A long-simmering row over plans for two new pipelines that would carry natural gas from Russia into Germany has advanced quickly in recent months, after gas company Nord Stream 2 submitted a notice of arbitration against the EU under the ECT on September 26, 2019.
A set of documents purporting to capture the discussions of the United States–United Kingdom Trade and Investment Working Group from 2018 has recently been released into the public domain.
UNCITRAL secretariat publishes documents to be considered at October 2019 session of Working Group III on ISDS reform
Delegates to the UNCITRAL Working Group III process on multilateral ISDS reform will meet again in Vienna during the week of October 14–18, 2019.
ICSID rule amendment process: Third working paper released in August 2019, consultation with states scheduled for November 2019, approval expected for October 2020
On August 16, 2019, the ICSID secretariat released the third working paper featuring proposed rule amendments, based on inputs from member states and the public.