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Research and Policy Analysis
 

By the end of 2013, the IIA universe consisted of more than 3,200 agreements, including 2,902 BITs and 334 "other IIAs", such as free trade agreements or economic partnership agreements with investment provisions. (Data and information available from World Investment Report 2014)

Trends in IIA signed, 1983-2013
Trend of BITs

The last years have seen an expansion of negotiations of broad economic agreements among a group of countries that together have significant economic weight and in which investment is only one of several subjects addressed. Work on the Trans-Pacific Partnership (TPP), the EU-United States Transatlantic Trade and Investment Partnership (TTIP) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA) are cases in point. Once concluded, these so called "megaregional agreements" are likely to have a major impact on global investment rule making and global investment patterns.

At the same time, the IIA regime is undergoing a period of reflection, review and reform. While almost all countries are parties to one or several IIAs, few are satisfied with the current regime for several reasons: growing uneasiness about the actual effects of IIAs in terms of promoting FDI or reducing policy and regulatory space, increasing exposure to ISDS and the lack of specific pursuit of sustainable development objectives. Furthermore, views on IIAs are strongly diverse, even within countries. To this adds the complexity and multifaceted nature of the IIA regime and the absence of a multilateral institution (like the WTO for trade). All of this makes it difficult to take a systematic approach towards comprehensively reforming the IIA (and the ISDS) regime. Hence, IIA reform efforts have so far been relatively modest.

In parallel, in 2013 investors initiated at least 56 known investor-State dispute settlement (ISDS) cases pursuant to IIAs. This comes close to the previous year's record-high number of new claims. During that year, investors brought an unusually high number of cases against developed States (26); in the remaining cases, developing (19) and transition (11) economies are the respondents.

Known ISDS cases, 1987-2013
ISDS cases

Nearly a quarter of all arbitrations initiated in 2013 involve challenges to regulatory actions by those two countries that affected the renewable energy sector. By the end of 2013, the number of known ISDS cases reached 568, and the number of countries that have been respondents in at least one dispute increased to 98. About three quarters of these ISDS cases were brought against developing and transition economies. The majority of known disputes continued to accrue under the ICSID Convention and the ICSID Additional Facility Rules (62 per cent), and the UNCITRAL Rules (28 per cent). Other arbitral venues have been used only rarely.

Finally, there is the growing recognition that sustainable development needs to be part and parcel of international investment policymaking. Against this background, the IIA Section undertakes a wide range of activities related to research and policy analysis that provide cutting-edge information about international investment rulemaking from a sustainable development perspective.

Among other activities, the IIA Section:

  • Collects data on IIAs and investor-State dispute settlement cases
  • Monitors trends in international investment policymaking
  • Identifies and highlights key emerging issues

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