6
Against this backdrop, the debate over the scope and
form of ISDS is primed to continue into 2018. While
some states and commentators continue to advocate
for tweaks to the existing system or the replacement
of ad hoc arbitration with more permanent
investment courts, others are in favour of wholesale
removal of ISDS. In October 2017, more than 200 law
and economics professors from US universities wrote
to President Trump urging him to remove ISDS
provisions from NAFTA and other US trade deals in
favour of national courts.
While a confidentiality agreement prevents
publication of the NAFTA negotiation documents,
press reports suggest that the US has proposed a
system by which the state parties could 'opt-in' to
ISDS. Meanwhile, the US Trade Representative has
published summaries of its renegotiation objectives.
The November 2017 iteration is silent on whether
ISDS should be 'opt-in' but cites various priorities for
ISDS, notably including that any such mechanism
should ensure that NAFTA's contracting parties can
address situations when a panel has erred in its
assessment of the facts or the obligations that apply
- suggesting a preference for some form of appellate
review. The objectives also note that the ISDS system
should 'provide meaningful procedures for resolving
investment disputes, while ensuring the protection
of US sovereignty and the maintenance of strong
US domestic industries'. Given the US Trade
Representative's hostility towards ISDS, this may
signal a preference for weakening the existing rules.
The renegotiation objectives appear to be designed
to address some of the public concern with ISDS,
including that international tribunals are empowered
to review US policy and the lack of a right of appeal.
Conversely, the finality of ISDS is seen as a key benefit
by both investor and state users alike.
What ISDS will look like in trade and investment
agreements negotiated by the Trump Administration
is likely to come to light in 2018, when the NAFTA
renegotiation is currently projected to conclude.
The form of ISDS in a renegotiated NAFTA may form
the blueprint for such mechanisms in subsequent
US agreements with China, Japan, the UK (postBrexit)
and, if TTIP is to be revived, the EU, all of
which have been cited as potential priorities for
the Administration.
Investor-state dispute settlement
in the age of Trump
1
Caroline Richard
Total NAFTA cases*
NAFTA cases brought against the US government*
NAFTA cases lost by the US government
NAFTA cases brought by US investors*
NAFTA cases won or settled by US investors
* including pending cases
Total ICSID cases: 662*
Cases by US claimants
at ICSID: 134*
Cases against the
US at ICSID: 5*
59 16 0
60
50
40
30
20
10
0
41 13
662 Total
number of
registered
ICSID
cases
* includes pending cases and ICSID Convention and
ICSID Additional Facility cases
' Notwithstanding the Trump
Administration's apparent hostility
towards multilateral trade and
investment deals, ISDS remains
an effective method of resolving
investment disputes. The trend
points to more investment treaties
in the future, not less, and ISDS
will remain a core feature of the
investment treaty system.'
NAFTA arbitration cases and the US
ICSID cases involving the US