International Trade: Examining Old Outcomes, Charting New Horizons

My name is Wolfgang Alschner, I’m the author of the book “Investment Arbitration and State Driven Reform: New Treaties, Old Outcomes” published by Oxford University Press.

The book argues that International Investment law is entering a new phase in its developments. While the past 10 years were about States reforming their investment treaties, this more recent era sees these new treaties being litigated in practice for the first time. Unfortunately, as I argue in the book, these new treaties have produced old outcomes. The field of International Investment law consists of thousands of mostly bilateral Investments treaties that protect foreign investors against unfair treatment, hence discrimination.

Historically, these treaties could fit on a paper napkin but that turned out to be a problem because most of these treaties give foreign investors the right to sue governments before International Investment tribunals. These investment treaties provided little guidance on what it means for investors to be treated unfairly and they had no exceptions to shield States from liability when they acted in the public interest.

New treaties are more detailed, they are longer, and they explicitly balance investment protection at Host States policy space. In my new book I show that this state-driven reform has been unsuccessful. New treaties have produced old outcomes.

Using a range of empirical techniques, new data sets, and different analytical frameworks ranging from known economics to complexity science, I provide a detailed account of what has happened and what we can do about it. Most importantly, I show that new Agreements are read like old ones. For example, I demonstrate how investment tribunals rely on outdated or even overruled precedence in order to interpret new agreements. The reliance on old precedence creates continuity but, in a context, where States seek change. The book also shows how investment reform can be rendered more effective, rather than having new treaties being read like old ones, old treaties should be read like new ones. I point to the international tax regime to Showcase how older agreements have been updated in light of more recent practice in both substance and procedure.

The book makes three important contributions for States, academics, and practitioners alike. First, it provides students and Scholars with an authoritative account to make sense of current developments. Second, it shows practitioners how to avoid some of the interpretive pitfalls and how to integrate data-driven arguments in their interpretive reasoning. Third it sets out a path for state negotiators to reform International Investment agreements.

Leading academics have called the book a “monstrous”. You can get it on Oxford Scholarship Online or order a copy from Oxford University Press.