What is it about?
The article looks at the scope, rationale, and results achieved with the text "agreed in principle" and announced in Dec. 2020 for the EU-China Comprehensive Agreement on Investment (CAI). The text contains original liberalization commitments and regulates ‘market access’ - a unicorn in the field -, going beyond the otherwise common 'investment admission’ promise, or the less common ‘establishment’ commitment. By focusing on this aspect, the analysis makes reference to a) the current legal and policy framework of both EU and China, b) their respective international investment agreement (IIA) policies, and c) the bilateral investment treaties between China and EU Member States. The CAI reveals a peculiar character as, in addition to its novel focus, it consolidates the EU's tendency not only to draw from other fields (including trade law, environmental law, labor law, sustainable development, and public international law) but also to try adding teeth to those provisions. However, considering CAI’s dramatic departure from established models, and its specific scope and context, the agreement may ultimately not contribute significantly to the development of the design and evolution of substantive rights afforded to foreign investors in this type of agreement.
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Why is it important?
This 'agreement on investment' with China is the latest the EU concluded, after those with Canada, Singapore, and Vietnam (to which reference is made in the article). All agreements are quite different from one another, as each reflects a different stage of the EU evolving position with respect to the negotiation of investment agreements - progressively more restrictive. If the first text, with Canada, features some remarkable yet limited characteristics (as it still features a relatively comprehensive and standard regime for the protection of foreign investments and investors), the text with China is altogether different, as here, for instance, the concept of investment protection, or the very definition of investment, are left out. An analysis of this latest agreement is therefore important, in particular if placed in a policy evolution perspective and by making reference to previous agreements, as it shows the understanding EU institutions (and, in particular, the Commission) display on the subject of international investment law - an area the EU has only obtained a (partial) competence with the entry into force of the Treaty of Lisbon, in 2009.
Perspectives
While the international community in various fora shows an overall shared understanding of the need to update a number of standards and mechanisms in the field of the protection of foreign investment, the EU seems focused on its own ground-breaking path, aimed at revolutionizing (for some, destroying) investment law as it has been for the past 70 years. It remains to be seen whether the trade and investment might that the EU expresses on negotiating tables, coupled with the wealth of technical expertise it can rely upon, will be sufficient in the long run to convince the rest of the international community to join it on this novel path. It may also be the case that the EU approach is felt out of touch, and progresses, if any, will be possible only on a bilateral basis or in selected fora.
Dr. G. Matteo Vaccaro-Incisa
University of Lincoln
Read the Original
This page is a summary of: Economic Integration via Novel Investment Agreements: CAI’s Focus on Market Access vis-à-vis the Current Bilateral Investment Treaties Between China and European Union Member States, The Journal of World Investment & Trade, August 2022, Brill,
DOI: 10.1163/22119000-12340259.
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