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https://studentshare.org/law/1482287-national-treatment-standard-in-international.
National Treatment Standard in International Investment Law and International Trade Law While the national treatmentconcept in international trade laws and international investment laws have a common origin, i.e., the treatment of aliens, they have always been focused on different purposes. In the case of international investment laws, the focus has mainly been on the promotion and protection of foreign investment. On the other hand, international trade laws have dealt with the liberalization of the flow of trade (DiMascio & Pauwelyn 64).
In international trade laws, the concept of national treatment attempts to deal with exchanges between different countries with regards to market access, liberalization, efficiency, overall welfare, and opportunities of trade. International trade laws do not deal with individual rights of the states. However, international investment laws’ political economy is strikingly different. BIT’s, initially, were meant to deal with the protection of foreign investors and investments that were already present in their host countries.
International investment laws seek to come up with favorable conditions aimed at investments through imposing international standards that respect non-discrimination, fair and equitable treatment, and expropriation. Investment protection, then promotes private financial and industrial enterprise, encourage investment, and increase both countries’ prosperity (DiMascio & Pauwelyn 65). The concept of national treatment in international trade laws ensures that, the interests of the two parties are aligned reciprocally since both look to find market access in each other’s country.
In international investment laws, on the other hand, the interests of the home country, or the capital exporting party, diverges from the interests of the host or capital importing countries (DiMascio & Pauwelyn 65). In essence, the country that is exporting capital will seek protection for its investors and its investments, whereas the capital importing party will offer this protection if only to promote and attract investment, as well as to accelerate its economic development. The capital importing country will exchange more investment for more protection of the investment.
Finally, international investment laws are based on fairness, protection, and individual rights, while international trade laws are based on efficiency, liberalization, and state-to-state market opportunity exchanges (DiMascio & Pauwelyn 66). Jurisprudence in international trade and investment laws acts to hinder the fulfillment of national treatment’s purpose in the individual fields. In making a determination on how investments from domestic and foreign sources are to be compared and contrasted, tribunals that are meant to deal with the investments have, to a degree, departed from precedents set by the national treatment principle in international trade law (DiMascio & Pauwelyn 71).
International investment laws and treaties require comparison made between treatments given to investors in like situations. However, tribunals aimed at resolving investment issues have decided that, unlike international trade law jurisprudence on products that are the same, a relationship based on competition is not as vital when it comes to domestic and foreign investment in similar circumstances (DiMascio & Pauwelyn 71). International investment tribunals have also rejected the use of likeness tests as used in international trade laws, emphasizing that the use of “in like circumstances” and the protection of investors from loss was indicative of the drafters’ intent to create different regimes for both fields (DiMascio & Pauwelyn 72).
Provisions for national treatment have acted as a pivotal component in trade agreements among nations for a long time. However, the importance of the national treatment principle in international investment law, to a certain degree, is recent, showing that a convergence exists between the two fields (DiMascio & Pauwelyn 72). As the provisions of national treatment are now resolved using the BITs, as well as other agreements on international investment, arbitration panels in international investment laws have been forced to deal with tensions that arise, from respect for the sovereign right of nations, to regulate internally and the prevention of foreign investment and investor discrimination.
Some experts have referred to jurisprudence in international trade laws and agreements, whereas some others have been slow and reluctant to take lessons from national treatment tests in international trade law. They, instead, have sought to create distinct national treatment body of jurisprudence, which has often seen them adopt legal stances that seem to be at odds with precedents in international trade law (DiMascio & Pauwelyn 72). For this reason, it seems as if jurisprudence in international law has hindered the fulfillment of national treatment’s purpose in international trade law.
To a certain degree, it is possible that divergent interpretations of international investment and trade law with regards to the principle of national treatment could be due to their very different institutional beginnings and settings (DiMascio & Pauwelyn 14). Arbitrators in investment law may possess very different motivations and professional backgrounds as compared to panelists who draft international trade laws and agreements. For instance, those arbitrators who deal with international investment disputes are often from a private commercial background.
On the other hand, international trade law and agreement adjudicators are usually from the public office domain. In addition, international trade law actors also act as a trade community that is institutionalized and well established, including experts and trade diplomats. These may sometimes find it hard to integrate new ideas into investment law. In contrast, arbitrations by state-investors is a newcomer that is now attracting increased attention with cases beginning to pick up in number in the early to mid 90s.
Therefore, the actors could feel that they have to legitimize and establish themselves (DiMascio & Pauwelyn 14). This, in turn, is behavior that could involve dissidence such as rejection of established international trade and investment law precedents. Their importance aside, focusing on the possible impact of political economies, underlying objectives, and historical impacts show that jurisprudence in each of the fields has hindered national treatment fulfillment in each other’s fields. Works Cited DiMascio, Nicholas.
& Pauwelyn, Joost. "Non-discrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin." The American Journal of International Law (2008): 48-89. Print.
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