Soft law versus hard rule approaches - Investment Facilitation

Investment Facilitation is a much discussed topic in international trade and investment circles. While it conjures up the old debates on investment protection, trade and investment linkages, it also brings up the issue of enforceability and soft law approaches.

A detailed piece by Anuradha in the Commonwealth Library website on Investment Facilitation charts the existing legal landscape and lays down two possible approaches - soft law, non-enforceable guideline based rules or legally binding rules.

A crucial aspect for consideration for countries, therefore, is the nature of the legal approach and the consequences of the obligations undertaken. Some of the issues that arise for consideration are outlined below:  

1. Option 1: Should investment facilitation be addressed as a ‘covered agreement’ under the WTO, which is enforceable through the WTO’s dispute settlement mechanism? Or, 

2. Option 2: Should investment facilitation be addressed through a set of guidelines and recommendations, which are implemented with technical assistance and capacity-building programmes? What should be the institutional mechanism that administers such guidelines: the UNCTAD or WTO – or should it be both in conjunction and cooperation with each other?

Either way trade negotiators need to equip themselves with alternatives. 

Of tariffs and protectionism

Came across this simple yet effective explanation of what tariffs are to understand the present debate on tariffs and protectionism in this piece titled "What is a tariff anyway?" in DevelopTradeLaw by Andrea. 

The three seemingly simple goals of tariffs - raising revenue, protecting domestic industry and social/health policy objectives - are implemented worldwide. Their extent and impact differ based on a country's developmental status and trade policy.

But is a tariff per se protectionist or tariffs beyond WTO commitments protectionist is a debatable question. Using policy space available under international trade agreements though intuitively protectionist may require a more nuanced understanding.

Public opinion, trace policy and surveys

Public opinion on international trade and trade agreements are generally not forthcoming or a priority. Trade negotiators sometimes give it more importance than what the public really perceive it to be.

An interesting piece on this by Scott Lincicome in the context of US trade policy and public opinion makes revealing reading. Titled "The Protectionist Moment that Wasn't" it explains public opinion in the US towards trade.



And the conclusion: a general lack of interest to trade policy issues!

Hat Tip: Cato website.

Disputes settlement information

Dispute settlement is integral to both the multilateral trading system as well as international investment. For those who follow disputes in both these arenas, the WTO website on dispute settlement and the UNCTAD website on ISDS cases is a rich source of information.

While WTO disputes touched 570 in 2018, known ISDS cases touched 904.