{"id":6416,"date":"2019-06-27T08:34:21","date_gmt":"2019-06-27T13:34:21","guid":{"rendered":"https:\/\/www.iisd.org\/itn\/?p=6416"},"modified":"2024-08-09T18:29:57","modified_gmt":"2024-08-09T16:29:57","slug":"australia-inks-new-bit-with-uruguay-trade-and-investment-deals-with-hong-kong","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2019\/06\/27\/australia-inks-new-bit-with-uruguay-trade-and-investment-deals-with-hong-kong\/","title":{"rendered":"Australia inks new BIT with Uruguay, trade and investment deals with Hong Kong"},"content":{"rendered":"

Australia has signed a new BIT<\/span> with Uruguay and an investment deal with Hong Kong. The agreements feature some changes or clarifications to past deals\u2019 provisions on ISDS<\/span> and on government regulations designed to fulfill public policy objectives, such as health.<\/p>\n

The new Uruguay agreement, on taking effect, would terminate the 2001 BIT<\/a><\/u>, while overriding that agreement\u2019s duration, termination and survival clauses. The new BIT, signed in April 2019, includes preambular language<\/a><\/u> on the states\u2019 right to regulate and flexibility to \u201cset legislative and regulatory priorities.\u201d Its exceptions article notes that \u201cnothing in this Agreement shall be construed so as to prevent a Party from adopting or enforcing measures\u201d essential for certain public policy objectives.<\/p>\n

Australia\u2019s new investment agreement<\/a><\/u> with Hong Kong, signed in March 2019, has a dedicated article on \u201cinvestment and environmental, health and other regulatory objectives.\u201d Parties will not be precluded from pursuing \u201cany measure otherwise consistent with this agreement\u201d that aims at ensuring that investments are \u201csensitive to\u201d certain public policy objectives. It features exceptions articles similar to the Australia\u2013Uruguay BIT.<\/p>\n

Once the new Australia\u2013Hong Kong investment agreement is in force, the prior Australia\u2013Hong Kong BIT will immediately be terminated. The original BIT<\/a><\/u> has a 15-year survival clause. Under the new agreement, existing investments would be covered under the original BIT\u2019s terms for 10 years from the date of entry into force of the new BIT.<\/p>\n

Both treaties have drawn the attention of investment watchers, particularly over whether they would adapt their wording around ISDS and the right to regulate following the investment disputes that emerged under the existing Australian and Uruguayan BITs on involving tobacco plain packaging and control measures. Australia and Uruguay also have a shared history in pursuing these and related public health measures.<\/p>\n

In November 2011, Philip Morris launched a case under the Australia\u2013Hong Kong BIT, claiming<\/a><\/u> that Australia\u2019s Plain Packaging Act amounted to an expropriation of its intellectual property and led to the company\u2019s Australian investments to lose much of their \u201creal value.\u201d An arbitral tribunal dismissed the case on jurisdictional grounds<\/a><\/u> in December 2015. Australia has also faced complaints at the WTO<\/span><\/a><\/u> and under its own constitution<\/a><\/u> over the plain packaging legislation.<\/p>\n

Uruguay is also a long-time proponent of tobacco control, including through plain packaging. While these measures were challenged by Philip Morris in 2010, the case was ultimately dismissed<\/a><\/u> and the tobacco giant was ordered to cover some of Uruguay\u2019s legal fees, along with all costs of the arbitration itself.<\/p>\n