After ten months of intense negotiations, the EU-UK Trade and
Cooperation Agreement (TCA) was concluded on 24 December 2020. The TCA runs to
1,246 pages and covers what may be the broadest range of issues ever to be
addressed within an international trade agreement. However, the TCA’s limited
investment protection provisions have been met with perplexity and expressions
of disappointment among commentators. In particular, the limited set of
substantive investment protections and the absence of an investor-State dispute
settlement (ISDS) mechanism have been viewed as something of a missed
opportunity, particularly as the EU and the UK have agreed to more expansive
investment chapters in recent trade agreements with third parties. Why did the
UK and the EU ultimately limit the scope of investment protection and exclude
ISDS under the TCA? This article examines this question by analysing the key
features of the TCA’s investment chapter and tracing the underlying investment
policy dynamics, including the UK’s and the EU’s respective negotiating
positions that led to the TCA’s circumscribed investment chapter. This article
also considers the significance and potential implications of the TCA for the
UK’s and the EU’s respective investment policies going forward.