Data Localization and the National Treatment Obligation in International Investment Treaties

Data localization hurts foreign investment and brings potential economic advantages to domestic corporations relative to foreign corporations. This leads to the argument that data localization violates the national treatment principle in international investment treaties. By applying the ‘three-step’ approach to assess the legality of data localization with respect to the national treatment principle, this article finds that the legality of data localization depends on certain circumstances, including the domestic catalogues of foreign investment, the definition of data localization in domestic legislation, and whether international investment treaties explicitly or implicitly incorporate data protection through exceptions for the protection of the state's essential security interests, public order, or public morals. China's acceleration of its legislation processes to regulate cross-border data transfer has significant implications for the negotiations and modifications of Chinese international investment treaties.

Part IV Guide to Key Substantive Issues, 21 The National Treatment Obligation

Most investment agreements contain a national treatment obligation, which requires that a host State treat foreign-owned investments at least as well as similarly situated national investments, or foreign investors as well as domestic investors. This chapter first explores the historical development of the national treatment obligation. It then addresses national treatment in practice, with particular reference to the investment treaty practice of the last decade and a half. As part of that examination, it sets forth the difficult and unresolved issues in the national treatment jurisprudence, including the hurdles that claimants face in establishing a national treatment claim. Finally, it addresses some of the reservations to national treatment that States have included in their investment treaties.

Taking Stock: What Do We Know, and Do not Know, about the National Treatment Obligation in the gatt/wto Legal System?

Even though widely recognized as one of the core disciplines of international economic law, the interpretation of national treatment (“nt”) obligation has been long marked by legal indeterminacy. More recently, a series of landmark cases, including us—Clove Cigarettes, us—Tuna ii (Mexico), us—cool and ec—Seal Products, have fundamentally reshaped our collective understanding of the nt obligation in the gatt/wto system. The objective of this article is to take stock of what we have already known about the nt obligation in the wto law, identify the lingering uncertainties and discuss the options for the wto Appellate Body to bring more clarity to the nt obligation in future dispute settlements.

‘Treatment No Less Favorable’ and the Future of National Treatment Obligation in GATT Article III:4 afterEC–Seal Products

The national treatment (NT) obligation embodied in Article III:4 of the GATT 1994 has been long marked by legal indeterminacy. Recently, the WTO Appellate Body has shed some fresh light on how the NT obligation should be interpreted inEC–Seal Products. The Appellate Body's report onEC–Seal Productsand other recent developments in WTO case law have fundamentally reshaped our collective understanding of the NT obligation. The purpose of this article is to take stock of what we have known about the NT obligation in GATT Article III:4 afterEC–Seal Products, as well as identifying some lingering uncertainties. This paper argues that the boundary of the NT obligation in GATT Article III:4 will be largely determined by how the Appellate Body deals with three big issues identified in this article in future disputes.