Even when it comes to investment, despite appearances to the contrary,
it does not seem to me that there is a shift to the non-discrimination
principle. First, there is no doubt that absolute standards such as fair and
equitable treatment or the provision on expropriation have by far
overshadowed the relative standards, in particular national treatment.
Second, while the MFN standard has, on the other hand, been a key provision
in investment treaty arbitration, particularly as an instrument to expand
the scope of the ISDS system (based on more favorable provisions found in
third-party treaties), there are clear signs in recent investment treaties
of the willingness to curtail the use of the MFN provision as a way to
extend the procedural and substantive protections of investors. This seems
to be the current position, for example, of both the United States and the
European Union (EU). Third, when it comes to the apparent disappearance of
the absolute standards of treatment in some of the treaties being negotiated
by the European Union (such as with Japan), this is more simply due to a
question of the nature of the EU external competence in commercial matters.
In its recent opinion on the EU-Singapore FTA, the Court of Justice of the
EU has determined that the EU does not have
exclusive competence to conclude agreements
covering non-FDI and ISDS. The EU has thus responded to such opinion by
splitting investment protection (with ISDS) from the rest of the trade
agreement, thus keeping investment liberalization (including market access
and national treatment) in the latter. In this way, while the trade
agreement will fall under the exclusive competence of the EU, the former
will still require ratification by each member state. While it is not clear
whether the backlash vis-à-vis investment protection and ISDS in some
quarters within some of the member states will eventually lead to the end of
EU investment treaties, a decision in this sense has not yet been taken by
EU institutions.
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