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While the Trump Administration has called into question the terms of its

international trade agreements, including investor-state dispute settlement (ISDS)

provisions, ISDS looks set to remain a feature of such agreements in 2018 and

beyond, albeit in amended form.

At the beginning of 2017, we questioned the future of

ISDS under a Trump Presidency. The Administration

had campaigned on a protectionist agenda and

promised to renegotiate and/or withdraw from

multilateral trade agreements, which inevitably

would prompt reconsideration of the ISDS

mechanisms in those treaties.

Over the last year, campaign promises against

multilateralism were transmuted into various forms

of government action and policy:

• in January 2017, the US withdrew from the

Trans-Pacific Partnership (TPP), but the remaining

11 signatories agreed to a revised version of the

treaty exactly one year later in January 2018,

known as the Comprehensive and Progressive

Agreement for Trans-Pacific Partnership (CPATPP).

While the text of the CPATPP had not been

released as of the publication of this briefing, it

reportedly includes only minor amendments to

certain ISDS provisions that had been agreed in

the TPP, including the suspension of ISDS to

investment agreements and authorisations;

• the Trump Administration gave some insight on

its views on ISDS in the US Trade Representative's

2017 Trade Policy Agenda, published in March

2017. The agenda bemoaned the country's

'deference to international dispute settlement

mechanisms' and called for a new policy 'that

defends American sovereignty';

• in May 2017, the US announced that it intended

to renegotiate the North American Free Trade

Agreement (NAFTA) and, since then, the US,

Canada and Mexico have held several rounds

of negotiations. ISDS has reportedly been a

point of contention, in particular; and

• negotiation of the Transatlantic Trade and

Investment Partnership (TTIP) between the US

and the EU was put on hold in 2017. The Trump

Administration cited a preference for pursuing

bilateral agreements (for instance, with Germany)

instead of a multilateral approach, but has since

suggested that it may recommence negotiations on

TTIP. Despite years of prior negotiation on TTIP,

the form of ISDS remains an open issue. In

particular, the EU has proposed a permanent

investment court, with first instance and appellate

tribunals. The Trump Administration is yet to

express a view in this proposal.

Caroline Richard

Partner

T +1 202 777 4561

E caroline.richard@freshfields.com

Noiana Marigo

Partner

T +1 212 284 4969

E noiana.marigo@freshfields.com

Investor-state dispute settlement

in the age of Trump

1

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