International investment liberalization, transnational corporations and NCD prevention policy non-decisions: a realist review on the political economy of tobacco, alcohol and ultra-processed food

Background Public health concerns relating to international investment liberalization have centred on the potential for investor-state dispute settlement (ISDS)-related regulatory chill. However, the broader political and economic dimensions that shape the relationship between the international investment regime and non-communicable disease (NCD) policy development have been less well explored. This review aimed to synthesise the available evidence using a political economy approach, to understand why, how and under what conditions transnational corporations may use the international investment regime to promote NCD prevention policy non-decisions. Main body Methods: Mechanisms explaining why/how the international investment regime may be used by transnational health-harmful commodity corporations (THCCs) to encourage NCD prevention policy non-decisions, including regulatory chill, were iteratively developed. Six databases and relevant grey literature was searched, and evidence was extracted, synthesized and mapped against the various proposed explanatory mechanisms. Findings: Eighty-nine sources were included. THCCs may be incentivised to use the ISDS mechanism since the costs may be outweighed by the benefits of even just delaying regulatory adoption, particularly since the chilling effect tends to ripple out across jurisdictions. Drivers of regulatory chill may include ambiguity in treaty terms, inconsistency in arbitral rulings, potential arbitrator bias and the high cost of arbitration. Evidence indicates ISDS can delay policy adoption both within the country directly involved but also in other jurisdictions. Additionally, governments are adopting standard assessments of public health regulatory proposals for trade and ISDS risk. Various economic, political and industry-related factors likely interact to increase (or decrease) the ultimate risk of regulatory chill. Some evidence indicates that THCCs take advantage of governments’ prioritization of foreign investment over NCD prevention objectives to influence the NCD prevention regulatory environment. Conclusions While ISDS-related regulatory chill is a real risk under certain conditions, international investment-related NCD prevention policy non-decisions driven by broader political economy dynamics may well be more widespread and impactful on NCD regulatory environments. There is therefore a clear need to expand the research agenda on investment liberalization and NCD policy beyond regulatory chill and engage with theories and approaches from international relations and political science, including political economy and power analyses.

Foreign Direct Investment Liberalization in Communist Regimes: A Theoretical Model Based on the Comparison Among China, Cuba, North Korea, and Vietnam

What are the driving factors for foreign direct investment liberalization in formerly communist countries? Previous research explains foreign direct investment liberalization as a function of the intensification of international commerce and democratization; however, the likes of China, Cuba, North Korea, and Vietnam hardly fit into this narrative. The following contribution makes a theoretical argument about the causes of foreign direct investment liberalization in communist authoritarian regimes with highly centralized and closed economies. We argue that foreign direct investment liberalization is caused by external shocks materializing in policy adaptations. The degree of foreign direct investment liberalization depends on the balance of power between actors who favor liberalization and actors who stand to profit from rent-seeking economies. The relative power of both factions determines the magnitude and type of foreign direct investment liberalization. We test this theoretical argument using case studies, which include China and Vietnam as representatives of gradual transitions and Cuba and North Korea as representatives of traditional rent-seeking economies.

Provisions to Integrate Environmental and Social Considerations into a Bilateral and Regional Trade and Investment Agreements for Sustainable Development

In this chapter, a comparative review of over regional trade and investment agreements (RTAs) provides analysis of how innovative mechanisms to address sustainable development issues can be interpreted in the context of a free trade agreement (FTA). The chapter explains how the measures identified through the volume’s analytical framework (typology) may assist Parties to a trade or investment agreement to deliver on a commitment to sustainable development in their treaty. The chapter then explains and analyses how States are starting to signal a commitment to sustainable development in carefully worded introductory provisions in their RTAs and investment treaties. It then moves to examine innovative operational provisions from bilateral or regional economic treaties discussed in this volume which explicitly mention sustainable development. The provisions are examined in light of their potential to respond to the three tensions identified earlier in this volume, and the corresponding rationale and opportunities for integration identified, including the potential interpretations of the mechanisms in light of the integration principle. Finally, the chapter considers examples highlighted from the survey of trade and investment liberalization impact assessments discussed earlier in this volume: sanitary and phytosanitary (SPS) measures, government procurement and investment liberalization, before exploring more advanced and innovative new measures.

INVESTMENT LIBERALIZATION, CREDIT CONSTRAINTS, AND INTERNATIONAL TRADE

This paper investigates the effect of bilateral investment treaties (BITs) on the extensive and intensive product margins of exports in sectors with different credit constraints. The model in this paper demonstrates that such investment liberalization increases the extensive product margin by lowering the variable costs of selling abroad, while it decreases the intensive product margin by lowering both the fixed investment costs and the variable costs. Moreover, the effects of investment liberalization are stronger in financially more vulnerable sectors. Using a detailed dataset of 190 countries and 27 manufacturing sectors from 1988 to 2006, this paper furnishes robust evidence that BITs increase the extensive margin of exports from developed countries and decrease the intensive margin of exports. It further shows that BITs decrease the intensive margin of exports from developed countries more in the sectors that are more dependent on external finance. Similarly, the intensive margin of exports from developed countries in low tangibility sectors falls by 11.81% because of BITs, while the intensive margin in high tangibility sectors is quite stable with BITs.

Investment Wars: Contestation and Confusion in Debate About Investment Liberalization

ABSTRACT Questions of investment governance are central to current trade wars. The USA complains of China’s use of restrictions on US investment as a lever to force technology transfer, while China complains of the review of investment in the USA on national security grounds. This article examines the place of these debates about investment liberalization within the trade wars. The focus is on US conduct, as the instigator of the trade wars. I argue that the USA is pursuing diverse and partially inconsistent in relation to investment liberalization. In some contexts, the USA is continuing to pursue the objective of removing impediments to outward investment, which was the principal objective of US investment policy for the decades prior to the Trump administration. In other contexts, the USA is seeking to encourage the repatriation of US outward investment and to regulate inward and outward investment according to ill-defined security rationales. I argue that prevailing materialist accounts of the trade wars struggle to explain these inconsistencies. Instead, I suggest that constructivist political economy provides a more promising explanatory framework. According to this view, inconsistency in policy objectives stems from foundational uncertainty about the nature of the ‘problem’ of investment liberalization.