Many smokers seem to think self-rolled cigarettes are less harmful than commercially manufactured brands. Assuming they are right (though I doubt it), the implication is presumably that, if you are going to smoke, you should smoke a rollie. But of course, if you ask your doctor (or anyone else), they will tell you that the best option is not to smoke at all. “Marginally less harmful” is not a ringing endorsement.
The EU-Canada Comprehensive Economic and Trade Agreement (CETA) offers us the hand-rolled cigarette of international investment law. Its obligations and exceptions are more nuanced than many investment agreements, and its dispute settlement system is more transparent.
If you were choosing between investment protection in CETA and investment protection in many existing bilateral investment treaties (BITs), CETA has obvious advantages. But this omits the third, and all-round preferable option, which is to reject international investment protection entirely.
Ireland, uniquely among EU members, has the option to do just that. Ireland has no existing BITs (though we do have some sector-specific obligations under the Energy Charter Treaty). If we ratify CETA then, for almost the first time, we accept liability to investors generally for the ways regulations and administrative decisions impact them, giving them rights beyond those in existing domestic and European laws.
Like smoking, investment treaties are hard to quit once you start – the investment obligations in CETA will continue for 20 years even if the rest of the agreement is terminated. Many more of these agreements are waiting in the wings. (Agreements with Singapore and Vietnam are signed and awaiting ratification.) This is perhaps the only opportunity Ireland will have to “just say no”.
The key issue with investment protection is not, as many critics on the left emphasise, that it ties states’ hands in important policy areas. It may indeed do this. Certainly, it conditions the availability of key regulatory tools, and provides a powerful argument for those resisting progressive economic and social policies. Many international agreements tie states’ hands, however – we give up some freedom of action in pursuit of coordinated responses to collective problems. The issue with investment protection is that there is no plausible problem to which it is the solution. There is nothing on the plus side, against which to weigh the constraints that CETA’s investment chapter asks Ireland to accept.
The traditional justification for investment treaties is that they are tools for attracting foreign investment. For developing countries in particular, and those with weak rule-of-law institutions, the perceived risks of discrimination, expropriation and inadequate access to justice may deter investors, limiting states’ access to international capital and impeding economic development.
Empirical studies have cast doubt on that story, finding little or no effect on investment flows as a result of entering into these agreements. To the extent such agreements may promote investment, they will only do so where the kinds of risks identified exist. The past 40 years suggest Ireland has no difficulty attracting international investment without providing these additional international legal guarantees.
Beyond this, we might justify investment protection as guaranteeing the kinds of treatment to which investors should be entitled: the rule of law, the protection of property, non-discrimination, access to the courts. They are, on this view, the market economic mirror image of human rights treaties, institutionalising the political morality of neo-liberalism.
To the extent we see them in these terms, however, we would presumably want the same protections for domestic businesses, and the appropriate place to establish them is in domestic legislation or perhaps even the Constitution (which does after all protect “the natural right . . . to private ownership”).
More importantly, the scope of these kinds of rights is plainly a matter of political contestation. Recent debates about the tension between rights to property and housing, and the possibility of a constitutional amendment, highlight this. We might want to protect these rights. Or we might want to limit them. This is an appropriate object of ongoing democratic deliberation. If we ratify this agreement, the space for that deliberation disappears.
Facile sovereigntists, of the kind dominating conversations about Brexit in the UK, reject international commitments as incompatible with sovereignty and democracy. More nuanced observers recognise that such commitments are the necessary price of international cooperation, and an expression of, rather than a barrier to, sovereignty. But this does not mean we should endorse every ostensibly hard-nosed bit of international economic law that comes along. Investment law is objectionable not because it ties the state’s hands, but because it provides no corresponding benefit, for us or anyone else.
Dr Oisin Suttle is Assistant Professor of Law at Maynooth University where he teaches international economic law and legal and political theory. He is the author of Distributive Justice and World Trade Law: A Political Theory of International Trade Regulation (2018, Cambridge University Press)