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ONDŘEJ SVOBODA
CYIL 6 ȍ2015Ȏ
this article the author has an ambition to contribute to the debate and provides his
views on different yet essential aspects of the inclusion of the chapter on investment
protection with ISDS in the TTIP. Accordingly, the importance of investment
relations between the EU and US is highlighted, as well as potential risks involving
protection of foreign investments. In the agreements with Canada and Singapore, the
European Commission has enforced several “reform” modifications, as opposed to
the “traditional” approach in investment treaty-making conducted by the capital rich
European countries. The innovative adjustments should have addressed some of the
shortcomings in investment protection and, in particular, the traditional investment
protection system. Unfortunately, this process is underestimated or rather ignored
by critics, as the state of the EU internal debate shows. In the view of the author,
recent efforts of both TTIP’s Parties to reform investment treaties provides strong
safeguards against the risk of increased investor-state arbitration under the TTIP. The
second strong rational for inclusion of investment protection rules and investor-to-
state dispute settlement is the unique opportunity to positively influence the existing
investment agreements system. In conclusion, the author offers his views on the
importance of preservation of the investment protection “pillar” of the Transatlantic
Trade and Investment Partnership.
Importance of investment in EU-US relations
In the context of EU-US economic relations, foreign direct investment plays
a significant role, as will be demonstrated below. Therefore, encouragement of
FDI through better investor protection provided by the TTIP is more needed now
than ever before. On the basis of data delivered by UNCTAD, for the first time
ever developing countries absorbed more FDI in 2012 than developed countries.
14
The investment chapter is meant to be a significant tool in the promotion of US
investment in the EU on the presumption that US investors will be provided with
valuable international legal protection that they currently enjoy only within a limited
group of EU Member States.
15
In academia, the view presuming that a special
investment protection in the form of a bilateral investment treaty or an investment
chapter in a FTA leads to increasing the flow of investment is highly disputed. Due
to the limited range of this article, the author just recalls this argument and leaves
it without further discussion.
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However, it is unquestionable that “investment
14
UNCTAD, World Investment Report 2013: Global Value Chains: Investment and Trade for Development,
United Nations (2013), p. 30.
15
Bulgaria, Czech Republic, Slovakia, Romania, Poland, Estonia, Latvia, Lithuania, Croatia.
16
An exemplary case is an analysis of the issue by Lauge Poulsen, Jonathan Bonnitcha, Jason Yackee,
Transatlantic Investment Treaty Protection, Paper No. 3, Centre for European Policy Studies (March
2015), pp. 4-10; and the following reaction by Freya Baetens, Transatlantic Investment Treaty
Protection – A Response to Poulsen. Bonnitcha, Yackee, Paper No. 4, Centre for European Policy
Studies (March 2015), p. 2.