[Prof. Dr. Anne van Aaken is Professor of Law and Economics, Legal Theory, Public International Law and European Law at the University of Sankt Gallen, Switzerland.]
Freya Baetens has done a terrific job of collecting and editing papers by young as well as very versed scholars on a timely topic; namely the integration of international investment law in public international law. Lurking behind is the more general discussion on fragmentation of international law; an issue considered so seriously by the international community that the International Law Commission constituted a study group led by Martti Koskenniemi which issued its report in 2006 and still sets the basic frame for discussion. Surely, investment law was never meant to exist in clinical isolation, and detailed accounts on the relationship between investment law and other law are always helpful. Part IV of the book deals with international investment, international trade and developing countries. I comment on one article: "Reviewing the administration of domestic regulation in WTO and Investment Law: The International Minimum Standard as ‘one standard to rule them all’?” by Anastasios Gourgourinis.
Gourgourinis aims to show that although trade and investment regimes are different on many accounts, they share a common core: the customary international law standard of minimum standard of treatment of aliens (MST). By juxtaposing equitable treatment provisions he submits that “the same set of facts regarding the administration of domestic regulation can give rise to successful challenges brought before either the WTO or investment arbitration tribunals.” He rightly points out that trade and investment cannot be viewed separately from each other in a globalized economy. His conclusion, drawing on case law especially in investment law, is that traders can also qualify as investors. I have two comments on that. First, I would suggest that this argument could be strengthened by - based on economic and management theory - taking a more functional view on why – with a view on domestic regulation – it is partially irrelevant for economic activity whether domestic regulation is targeting trade or investment. Both kinds of regulation are, depending on the sector and the type of investment/trade, partially substitutable from a business actor´s point of view. Second, I would caution about the
normative conclusion of the simultaneous qualification of traders also as investors. Whether traders qualify as investors has been discussed for a long time (just as the other criteria for an investment), but the question is especially delicate in the light of the Apotex v United States tribunal (NAFTA, Decision from June 2013, that is after publication of the book). The tribunal stated that Apotex's "activities with respect to the contemplated sales of its . . . products in the United States are those of an exporter, not an investor," declining jurisdiction. Regardless of whether this decision is right or wrong, what is important is to discuss the consequences (economic and otherwise) of granting investor status to traders, conflating trade and investment regimes through the back-door. Economic as well as political economy reasons might exist why states don’t treat traders and investors alike, in spite of functional partial equivalence.
What follows is an in-depth and thorough analysis of MST as custom as well as the norms and case-law of WTO law and investment treaties. Gourgourinis argues that the MST, since it applies to all aliens and since it is custom, applies to investors and traders alike. It constitutes a “floor” of treatment and permeates, in his view, the proper administration of justice of domestic regulation vis-à-vis aliens. He does a tremendous job in selecting the norms in the WTO agreements which have MST cores for transparency and procedural justice, e.g. Art. X: 3 GATT or Art. VI GATS, uncovering minimum due process guarantees inherent in those norms. He does the same for norms containing the prohibition of arbitrariness, e.g. Art. XX GATT and Art. XIV GATS. He then attempts to demonstrate that those “provisions of the WTO agreements as minimum standard of treatment of foreign traders are essentially identical to the (customary) international minimum standard of treatment of foreign investors,” thereby zooming up the MST. He then looks at the “fair and equitable treatment” standard (FET) and its interpretation in investment law, although he acknowledges that depending on the respective treaty FET is either referring to MST or it is viewed as s self-standing standard.
I take issue with equating the MST with FET or rather the other way around: redefining the MST through certain interpretations of the FET or the WTO provisions.
