In 2009, the Treaty of Lisbon conferred the European Union
the exclusive competence on foreign direct investments in Art. 207 TFEU.
Together with the common commercial policy, it is now one of the main pillars
of the external action of the EU. The Union has seen this new competence as
good opportunity to carry out a comprehensive regulation of trade and
investment issues at the European level and has applied it in the negotiation
of a series of investment agreements with other States such as Canada, the
United States, Vietnam, and Singapore. An intense public debate has arisen on
the opportunity of entering into these agreements and whether they should
include references to arbitration as an investor-state dispute settlement
mechanism (ISDS). The context to this is the growing opposition to the
traditional mechanisms of ISDS in some Member States and sectors of the civil
society. Meanwhile, in the US, there has also been growing public opinion
opposing investment treaties and external and parallel mechanisms of investor
protection from both sides of the political spectrum and for various reasons.
Prior to the 2016 Presidential Elections, prominent democrats opposed the
Trans-Pacific Partnership (TPP) as long as ISDS mechanisms were included. The
present article includes an analysis of trade policymaking in the US and the
attitude of the US Congress to new mega-regionals and new investment treaties.
Being a major issue in Europe, it focuses, in particular, on the policy
position concerning ISDS as the method of choice for resolving disputes between
investors and the host countries.