The Free Trade Agreement between New Zealand and

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1 Investment chapter of the NZ China FTA Daniel Kalderimis, Chapman Tripp, Wellington explores a new venture in international law making The Free Trade Agreement between New Zealand and China (NZ China FTA) (see was signed on 7 April 2008 and entered into force on 1 October Most attention to date has been on the trade provisions. This is unsurprising. It was a significant achievement, after three years of negotiations, to be the first developed country to establish a free trade area with China (see art 1) and the NZ China FTA extends to both goods (see ch 3) and services (ch 9). New Zealand s economy is powered by exports and the FTA will eliminate Chinese tariffs on 96 per cent of its current exports to China. Another first for New Zealand in the FTA has received less attention. This is the investment chapter, ch 11, which effectively constitutes New Zealand s introduction to the world of binding investor-state international arbitration. This article discusses the scope of ch 11, the relative experiences (or lack thereof) of both New Zealand and China in investment treaty arbitration and international developments likely to impact on how ch 11 is applied. It then considers the future. INVESTMENT TREATIES AND ARBITRATION Disputes relating to trade are governed, at an international level, by the Understanding on Rules and Procedures Governing the Settlement of Disputes (Annex 2 of the WTO Agreement), under which states can bring disputes before three-member panels, whose decisions can then be appealed to a permanent Appellate Body. There is no equivalent international system for disputes relating to investment. Instead, over the last 15 to 20 years there has been a proliferation of bilateral investment treaties ( BITs ), usually between capital exporting and capital importing countries. Although the speed at which new BITs are being signed now appears to be slowing, as of June 2008 it is estimated that there were 2619 BITs in force. Most countries in the world are now party to many BITs. For instance, it is estimated that Germany is party to over 130 BITs and the UK to over 100. Even developed countries not traditionally reliant on overseas investment have usually sought to maintain an active investment treaty programme. Australia and Canada are each party to approximately 25 BITs. The BIT phenomenon has been especially embraced in Asia and Oceania, the states of which are party to over 40 per cent of all BITs ((2008) IIA Monitor No 2, 3 at Arguably the most important feature of BITs, or the investment chapters of FTAs (which can be viewed as BITs within a larger agreement), is their provision for the settlement of investment disputes by direct investor-state arbitration. Arbitration is a consensual process which has historically been used to resolve disputes between investors and host states. The innovation made by BITs is a mechanism which has been described as arbitration without privity (Paulsson, (1995) 10 ICSID Rev 232). That is, BITs include a provision by which both state parties give their consent, in advance, to an investor from the other state commencing arbitration with respect to a qualifying investment. The consent is perfected and the arbitration agreement formed by the investor filing a request for arbitration. The importance of this innovation is that arbitration awards are perhaps the most internationally enforceable form of commercial ruling. This is so because of two multilateral treaties widely subscribed to by most states, including New Zealand and China: the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) directed to all forms of international commercial arbitration; and the 1966 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), specifically directed to investor-state arbitration. Aspects of these treaties are discussed below. NEW ZEALAND S BIT PRACTICE New Zealand s investment treaty practice is modest. It appears that prior to the NZ China FTA, New Zealand had signed eight investment agreements. Of these, two (with Samoa) have expired; two (with Argentina and Chile) are not in force; two (with Mexico and the US) are not BITs in substance but are exploratory agreements; and the remaining two were with mainland China and Hong Kong respectively. None of New Zealand s previous BITs, including those with China and Hong Kong, contained a full investor-state arbitration reference. The 1988 NZ China BIT provided only for an investor to submit a dispute involving the amount of compensation resulting from expropriation to arbitration (art 13(3)). This meant that the question of whether there had been an expropriation needed first to be settled between the parties. The 1995 Hong Kong NZ BIT stated that, in the event of a dispute, the investor and the host state should seek to agree the procedures for settlement within six months, after which both were bound to submit the dispute to arbitration (art 9). Despite the exhortatory language, it is unclear that this would have been viewed by an arbitral tribunal as a sufficient grant of jurisdiction. This does not mean that New Zealand has never been involved in investment arbitration. In the 1980s the New Zealand government was taken to ICSID arbitration by Mobil Oil, which successfully alleged that the government had improperly interfered with the pricing terms of a joint participation agreement relating to a synthetic fuel plant (Mobil Oil Corporation v New Zealand (1989) 4 ICSID Rep 140, Attorney-General v Mobil Oil NZ Ltd [1989] 2 NZLR 156

2 649, and D Williams QC Note: AG for New Zealand v Mobil (1995) 11 Arb Int l 96). But this case arose under the ICSID arbitration clause contained in that agreement, rather than through a standing offer to arbitrate in a BIT. Thus, with the NZ China FTA, for the first time: (a) New Zealand investors have an enforceable international law right to arbitrate investment disputes against a foreign government; and (b) foreign investors in New Zealand have the same right against the New Zealand government. We are therefore at the start of the road that other countries, such as the NAFTA parties, first followed over a decade ago. There is much to learn from their experiences. CHINA S BIT PRACTICE China s investment treaty practice is prolific (see Gallagher and Shan Chinese Investment Treaties: Policy and Practice (2009)). China has now signed more than 120 BITs and is actively negotiating further BITs with several developed countries, such as Canada. Looking at the number of treaties alone, however, obscures two important facts. First, China s BIT history can be divided into two periods. In the first period, the early 1980s to the late 1990s, as exemplified by the 1988 NZ China BIT, China restricted the ability of foreign investors to arbitrate disputes relating to liability. Only after this did China begin to agree to full investor-state arbitration clauses in its BITs and only from the early 2000s did China s new BITs routinely include this feature (Schill Tearing Down the Great Wall: the New Generation Investment Treaties of the People s Republic of China (2007) 15 Cardozo JICL 73; and Rooney ICSID and BIT Arbitrations and China (2007) 24 J Int Arb 689). Secondly, China has never been a respondent to an investorstate treaty claim (so far as is known). Other developing countries, including India and countries in Latin America, have become much more experienced in BIT arbitration. MAIN STANDARDS OF PROTECTION BITs are somewhat formulaic instruments and all tend to provide with important variations, exceptions and nuances the same suite of investment protections. To begin with, BITs tend to set out a definition of investor, defining who can bring a claim, and investment, defining the qualifying subject-matter of any claim. The substantive protections offered are usually the following (or a selection thereof): national treatment; most-favoured nation ( MFN ) treatment; fair and equitable treatment; full protection and security; access to justice and the prohibition of denial of justice; an umbrella clause, guaranteeing the observance of contractual obligations; transfer of funds provisions; and a provision regulating the process of expropriation. Each of these standards can be, and in many cases has been, the topic of an entire monograph or book. That is, the meanings accorded to these increasingly well-known (and some might say, well worn) investment protections is fast becoming intelligible only by reference to the growing array of case law and academic writings. Below, I offer a rough précis of each standard. Useful further reading is Newcombe and Paradell Law and Practice of Investment Treaties (2009), Dolzer and Schreuer Principles of International Investment Law (2008) and McLachlan, Shore and Weiniger International Investment Arbitration: Substantive Principles (2007). The concept of national treatment protects a foreign investor from being treated less favourably than investors of the host state. The difficulty is in determining when a foreign investor and a national investor are really in a comparable situation so as to judge whether the foreign investor has been unjustifiably discriminated against. For instance, do they have to be in precisely the same industry and, if so, how is this to be defined? In making this judgment, the appropriateness of the analogy with the equivalent provision in GATT art II(2), and hence the guidance which can be gained from WTO jurisprudence, is a matter of controversy. MFN treatment, as with GATT art I, protects an investor from being treated less favourably than a third party national. The clause is thus only engaged through benefits granted to a third party. Many BITs enumerate the substantive areas to which the clause is to apply, such as the management, maintenance, use, enjoyment or disposal of investments. There has been significant controversy over whether MFN clauses should apply to procedural rights (such as more expansive dispute resolution provisions) as well as substantive rights accorded to third parties. Fair and equitable treatment, one of the least specific standards, has in recent years emerged as the catch all ground of investment treaty claims and has come to be closely associated with the concept of legitimate expectations. Thus, it is frequently invoked to challenge nontransparent, inconsistent, arbitrary or capricious state conduct. Full protection and security has not been greatly explored in investment treaty case law. Traditionally, it has been restricted to situations where an investor has suffered physical harm due to actions attributable to the host state. An example is where employees of a state entity seized a hotel owned by the investor and the host state s police did not prevent them from doing so. The modern understanding is that it also applies to ensure the investor receives the protection of the laws and regulations of the host state. Access to justice tends to come into consideration if the judicial bodies of the host state refuse to entertain a suit, subject it to undue delay or administer justice in a wholly inadequate way, for instance by maliciously misapplying the law. There is also little developed case law on this standard. Commentators have suggested that it may be able to be invoked to counteract the retrospective application of laws. By an umbrella clause, the BIT contracting parties guarantee the observance of obligations assumed by the host state towards an investor, for instance in a concession agreement. Controversy has arisen as to whether such clauses permit an investor to refer all disputes which have arisen under their investment agreement with the host state to investment treaty arbitration under a BIT. The prevailing view is that such a clause will apply to agreements entered into by the host state in its capacity as a sovereign rather than as a merchant. Transfer of funds provisions are significant, but overlooked, investment treaty protections. These provide for the free repatriation of funds and profits from the host country to the investor s home country. This is usually an important facility in ensuring that the investment is viable. 157

3 Finally, and most important, BITs invariably regulate the exercise of the state s power to expropriate investments. BITs set out conditions under which expropriation will be lawful, which (although not uniform) are generally that the expropriation must: be for a public purpose; not be arbitrary or discriminatory; and be accompanied by the payment of prompt, adequate and effective compensation, which is generally understood as the market value of the investment immediately prior to the expropriatory act. Some BITs also prescribe that the expropriation must be effected according to notions of due process. It is reasonably well settled that, subject always to the precise words of the BIT, expropriation extends to both direct and indirect measures (such as those which remove ownership but not control or which negate the value of the investments) as well as to creeping expropriation. To clarify this, many BITs extend protection to measures tantamount or equivalent to expropriation. There is a school of thought that the compensation for an unlawful expropriation should be assessed on a different, and more generous basis, than compensation for a lawful expropriation. BITs do not usually contain a general exemption to justify state action in breach of a BIT standard, such as in GATT art XX. Some international law defences have, however, been invoked. Argentina has, for instance, frequently invoked the international defence of necessity in respect of its actions following the Argentinean financial crisis. This has usually failed but on occasion has succeeded due to specific treaty wording. PROCESS There is too little space to describe the arbitral process in detail, save to note three features. First, BIT arbitration is always invoked by an investor against a state. Until the investor commences the arbitration, it has not given its consent to arbitrate. The state s offer to arbitrate, in contrast, is contained in the dispute resolution provision of the BIT. Second, the dispute resolution provision will usually set out the specific arbitral options to which the states have consented. The three main options are: (a) ICSID arbitration: only if both the host state and the home state are parties to the ICSID Convention and if the investment falls within the scope of that Convention (see art 25), as well as within the scope of the BIT. ICSID arbitration offers totally de-localised arbitration conducted under the auspices of the Convention, rather than under any state s national arbitration law. Ease of enforcement has historically been perceived as one of the main advantages of ICSID, as the Convention contains specific enforcement obligations and ICSID awards cannot be challenged before state courts (arts 53, 54). It is possible to challenge an ICSID award through a special annulment process which sets out five narrow grounds formulated to accord priority to finality over legal correctness. (b) UNCITRAL arbitration: under the ad hoc UNCITRAL Arbitration Rules, which means that the arbitration is not administered by any institution. It is, however, conducted under the law of the state which is chosen to be the seat. This is usually not specified in most BITs and will be decided by the tribunal, pursuant to powers in the UNCITRAL Arbitration Rules, once the tribunal is formed. It is much easier to secure the assistance of domestic courts, for instance in obtaining provisional measures, for UNCITRAL arbitrations than for ICSID arbitrations. UNCITRAL awards are enforceable under the New York Convention in states which are party to it. (c) Administered arbitration: usually operates under the rules of one of the major international arbitral institutions, such as the International Chamber of Commerce (ICC) or the Stockholm Chamber of Commerce (SCC). Aside from this feature and the oversight which comes with it the above comments with respect to UNCITRAL arbitrations apply. Third, there are often procedural prerequisites which must first be satisfied before a BIT arbitration may be commenced. These can include cooling-off periods or a requirement to exhaust local remedies. Conversely, BITs can include a forkin-the-road provision, according to which an election to pursue another form of remedy (for instance in local courts) may be deemed to be a waiver of the right to arbitrate. NOTABLE FEATURES OF CH 11 Chapter 11 is derived from China s second generation BITs. It is also influenced by the drafting of the investment chapters of Australia s FTAs with Singapore and Thailand. It contains several interesting features, the most important of which are summarised below. As a general reference point, I will use the 2001 China Netherlands BIT and the 2003 China Germany BIT (both available at Article 135 contains a broad definition of Investment, which includes every kind of asset invested, directly or indirectly, including but not limited to property, shares, claims to money, intellectual property rights, concessions, bonds and rights conferred by law or contract, such as licenses. This is broader than the definition in the Netherlands and Germany BITs, particularly in its references to all contract rights. This article also provides that [i]nvestments extends to investments of legal persons of a third country which are owned or controlled by investors of one Party, provided the third country has no, or disclaims its, right to claim compensation for expropriation. This is a useful clarification that investments by a New Zealand or Chinese investor may still be covered even if directly made through an offshore vehicle. Conversely, art 149 contains a denial of benefits clause with respect to investments made by investors of one Party, where the investment is made through a legal entity owned or controlled by nationals of the other Party or a third party (cf Rompetrol Group BV v Romania, Decision on Jurisdiction, 18 April 2008, ICSID Case No ARB/06/3). Article 137 defines the scope of ch 11, which applies to measures adopted or maintained by a Party relating to investors, and investments of investors, of the other Party. This article is set out differently from both the China Netherlands andthechina GermanyBITs(compareart1ofeach).Article137(6) extends protection to all investments made by investors of a Party within the other Party s territory, whether made before or after 1 October 2008, provided these were not at that date already the subject of a judicial or arbitral process. Article 138 contains a national treatment protection, with the relevant comparator language being treatment no less favourable than that accorded, in like circumstances, to the investments by its own investors. This language is better crafted than that in the China Netherlands (art 3(3)) and 158

4 China Germany (art 3(2)) BITs. There is also a host of existing guidance on the interpretation of this phrase in BIT case law. The utility of this provision is, however, limited by art 141(1), a provision found in other China BITs, which grandfathers existing non-conforming measures maintained within a Party s territory. Its utility is also limited by art 141(3) which provides that the art 138 national treatment obligation should not be interpreted to apply to any measures which do not already fall within the national treatment obligations in either Party s existing BITs. Article 139 contains an MFN provision, which again uses an in like circumstances comparison and limits the scope of the provision to admission, expansion, management, conduct, operation, maintenance, use, enjoyment and disposal of investments. Responding to debate on MFN clauses and procedural rights, art 139(2) provides: For greater certainty, the obligation in this Article does not encompass a requirement to extend to investors of the other Party dispute resolution procedures other than those set out in this Chapter. There is also a carve-out for fisheries and maritime matters (art 139(5)). Article 142 contains a detailed free transfer of payments provision. On first blush, this should be especially welcome, given China s exchange controls. However, art 142(3) provides that the free transfer right must still comply with the relevant formalities stipulated by the present laws and regulations of China relating to exchange control, subject to certain more detailed guarantees as to how and in what way those controls may be applied (cf China Netherlands BIT, art 7 and the Protocol ad art 7; and China Germany BIT, art 6 and the Protocol ad art 6). It is unclear to what extent this right can be relied upon to assist investors in practice. Article 143(1) contains fair and equitable treatment and full protection and security guarantees. Article 143(2) contains an interestingly-worded, and seemingly new, prohibition against denial of justice, which it brings within the ambit of fair and equitable treatment: Fair and equitable treatment includes the obligation to ensure that, having regard to general principles of law, investors are not denied justice or treated unfairly or inequitably in any legal or administrative proceeding affecting the investments of the investor. Full protection and security is defined in art 143(3) and fair and equitable treatment, in the sense of freedom from unreasonable or discriminatory measures, is further defined in art 143(5). Article 143(6) reduces the catch-all nature of fair and equitable treatment by providing that a breach of any other article of ch 11 does not establish a breach of art 143. Article 145 contains a fairly traditional expropriation provision, providing that expropriation is only permitted: (a) for a public purpose; (b) in accordance with domestic law; (c) carried out in a non-discriminatory manner; and (d) not contrary to any undertaking which the Party may have given; and (e) on payment of the fair market value of the expropriated investment immediately before the expropriation measures were taken. Point (d) is an interesting clarification that the investor s legitimate expectations can be taken into account in determining whether or not expropriation is lawful. The meaning of art 145 is elucidated in Annex 13, which rarely for BITs provides clear interpretative guidelines on what actions constitute expropriation. This makes clear that expropriation may be direct or indirect and will extend to interference with tangible or intangible property rights. The meaning of indirect expropriation is confined to measures which are: (a) equivalent to direct expropriation, in that [they] deprive[] the investor in substance of the use of the investor s property... ; (b) either severe or indefinite; and (c) disproportionate to the public purpose. Indications that measures are likely to constitute indirect expropriation include those which are discriminatory in effect or in breach of prior binding written commitments to the investor. This is a sophisticated definition which draws on recent BIT case law. Most significantly, Annex 13 contains a carve out for the reasonable exercise of a state s police powers, which is intended to offer a safe harbour for regulation which is reasonably justified in the public interest. This is notable and takes account of criticisms of the early operation of the NAFTA investment chapter. Future disputes are likely to focus on precisely where indirect expropriation ends and the proper exercise of police powers begins. Chapter 11 does not contain an umbrella clause (cf China Netherlands BIT, art 3(4) and China Germany BIT, art 10(2)), probably to avoid debate about the circumstances in which a contract claim may be elevated into a treaty claim. The most important feature of ch 11 is the investor-state dispute resolution procedure, contained in arts The procedure can be summarised as follows: (a) once a dispute arises, it is subject to a six-month negotiation and consultation period before the investor may submit it to arbitration (arts 152 and 153); (b) if the dispute cannot be settled amicably, the investor may submit the dispute to arbitration, provided that the investor gives three months notice to the state party, which may then require the investor to go though any applicable domestic administrative review procedures whichmaynotexceed3months (art153(2)). It is not clear whether an investor may trigger the three-month administrative review period during the six-month negotiation period. This accommodates China s Administrative Review Procedure, enacted into legislation in 1999 which is also factored into the China Netherlands BIT, Protocol to art 9; China Germany BIT, Protocol ad art 10; (c) the investor has the choice of ICSID or UNCITRAL arbitration (art 153(1)); (d) there is no fork-in-the-road : an investor may pursue both domestic court remedies and investment treaty arbitration, provided the investor withdraws its court case before final judgment (art 153(3)); (e) there is, however, a limitation period of three years following the investor s discovery, or the reasonable discoverability, of the breach (art 154(1)). This is rare and does not feature in the comparison BITs. There is existing case law on the enforcement of cooling-off periods and requirements to submit to local procedures before commencing arbitration. In some cases these so-called formal requirements have not been upheld. However, this result has usually been reached by engaging more favourable dispute resolution procedures on an MFN basis. The express disapplication of art 139 to other dispute procedures would render such arguments difficult in this context. 159

5 A further interesting feature is art 154(2), which permits a state party to file an objection that an investor s claim is manifestly without merit, within 30 days of the constitution of the tribunal. This is borrowed from the 2006 review of the ICSID Arbitration Rules (r 41(5) and (6), see Petrochilos, Noury and Kalderimis Annotated Commentary to the ICSID Arbitration Rules in Mistelis (ed) Concise International Arbitration (Kluwer: forthcoming May 2009)) and is intended to give a state party an opportunity to pursue a form of strike out application against frivolous claims; which, without specific authorisation, is usually not contemplated in international arbitration. Article 156 provides a rudimentary consolidation provision, for circumstances where multiple investors file claims arising out of the same circumstances. This, however, lacks teeth as it merely directs the parties to consult, rather than giving power to a tribunal to order consolidation. Finally, art 158 specifies that a tribunal cannot award punitive damages, and that any award against a state party is restricted to monetary damages and restitution of property. It would thus seem that other forms of specific performance and mandatory injunctions are not permissible. Article 158(5) provides that a disputing party may not seek enforcement of a final award until all applicable review procedures have been completed. This is presumably intended to refer to the ICSID annulment procedure; and thus purports to create a de facto stay of enforcement whilst an annulment committee is formed and considers the case. This may prove somewhat dispiriting for investors who have won convincingly in front of the tribunal and may be an incentive to elect UNCITRAL arbitration. On the other hand, China s reservations to the New York Convention include that China will apply the Convention only to differences arising out of legal relationships, whether contractual or not, that are considered commercial under the national law. The Supreme People s Court has held that disputes between a foreign investor and the government of a host country are not commercial, thereby indicating that an investor-state dispute cannot be enforced in China pursuant to the New York Convention (Rooney, pp 708, 709). More hopefully, art 158(6) provides that, subject to art 158(5), a disputing party shall abide by and comply with an award without delay. This mirrors the language in art 53 of the ICSID Convention. It is not, however, a guarantee. The real difficulties arise when seeking to execute against state assets, which comes up against sovereign immunity arguments. It is not yet known how effectively the enforcement and execution process will work in China. CHINA S DRAGON WILL BREATHE FIRE With US$84 billion of foreign direct investment (FDI) inflows for 2007, China is by far the world s largest emerging market importer of FDI. It will inevitably become a respondent to a BIT claim, probably sooner rather than later. Indeed, if Argentina s experience is anything to go by, any severe economic event which forces the Chinese government to alter its policies towards any aspect of foreign investment may well trigger a wave of claims. The effects of the present economic crisis should therefore be carefully monitored; few countries have achieved China s recent levels of dramatic growth without encountering some speed bumps along the way. It is a truism that each BIT (and FTA) is a separate instrument, the text of which must be construed according to orthodox international law principles such as those contained in the Vienna Convention on the Law of Treaties It is equally a truism that there is no system of binding precedent in investment treaty case law, and each tribunal is bound, anew, to interpret the text of the treaty in front of it and arrive at its own decision. However, behind these statements of principle exists a burgeoning investment treaty practice, in which cases are argued and decided by a relatively small community of counsel and tribunal members and in which almost every decision considers carefully previous decisions (Commission, Precedent in Investment Treaty Arbitration: a Citation Analysis of a Developing Jurisprudence (2007) 24 J Int Arb 129). This informal system is not binding, but no investment treaty practitioner can afford to be unaware of recent decisions and how they may be applied to new situations. This means that the guarantees contained in ch 11 have already, in a sense, been considered by previous tribunals. What has not yet been considered because China has not yet been an investment treaty respondent are the special features of China s second generation of BITs, of which ch 11 is a leading example. New Zealand lawyers seeking to understand ch 11, for instance, in order to advise corporate clients of how best to structure their investments, will need to become familiar with the key cases and commentary in the relevant areas of BIT protection. A global recession is likely to precipitate new BIT disputes, possibly even against developed countries, such as the UK, for their role in nationalising financial institutions. More importantly, New Zealand lawyers should be on the lookout for the cases which will in time be launched by Chinese investors or against China, in order to consider how the arguments and reasoning from those cases might affect a tribunal s interpretation of ch 11. DEVELOPMENTS ACROSS THE TASMAN Most pertinent are Australia s four FTAs containing substantive investment chapters: Singapore Australia (2003), Thailand Australia(2004), US Australia(2005) and Chile Australia (2008). Two observations might be made. First, the US Australia FTA does not contain an investor-state arbitration mechanism. The reasons for this are not clear, but it may be partly due to US experience with Canadian investors under NAFTA. Second, two of those FTAs, Singapore Australia (ch 8, art 19) and Thailand Australia (ch 9, and art 1601(3)), contain general exception provisions derived from art XX of the GATT. New Zealand lawyers should watch to see the impact of those provisions in practice. FUTURE DEVELOPMENTS IN ASIA-PACIFIC Chapter11isparticularlysignificantasitisatemplateforNew Zealand s rapidly expanding investment treaty framework. On 27 February 2009, New Zealand signed the ASEAN- Australia-NZ FTA which contains a similarly-worded ch 11. New Zealand is currently negotiating FTAs with the Gulf Cooperation Council and Korea, as well as the Trans-Pacific Partnership involving the P4 countries (New Zealand, Brunei Darussalam, Chile and Singapore), Australia, Peru and the US (although the Obama administration has temporarily placed participation on hold). Negotiations with India are just beginning.theendgameisasinglefreetradeareaspanningasiaand the Pacific Rim. Whilst, again, most attention will be focussed on the trade elements of the forthcoming agreements, the investor protection regime, and its provision for investor-state arbitration, should be closely monitored. 160