NEW APPROACHES TO THE BALANCE BETWEEN INVESTOR PROTECTION AND THE RIGHT TO REGULATE WITHIN MEGA‑REGIONAL AGREEMENTS

INTRODUCTION. In 2015 UNCTAD elaborated a roadmap for international investment agreements reform, aimed at bringing the terms of such agreements in line with modern sustainable development imperatives. For a long time the question of the balance between investor protection in the territory of the host state and the right of this state to regulate within international investment and trade agreements has caused controversy among international law scholars. In particular, very often international agreements endow foreign investors with greater rights thereby limiting sovereign rights of the host state. The present article provides a comparative analysis of the investment protection and promotion provisions under the Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11). Also, for the first time among Russian scholars, the authors give an analysis of the changes that occurred during the signature of the CPTPP Agreement on March 8, 2018 after the US withdrawal at the beginning of 2017. MATERIALS AND METHODS. The research in the article is based on the provisions of the CPTPP and CETA that regulate foreign investments as well as the works of Russian and foreign international investment law scholars. It is necessary to mention the significant role of the World Investment Reports, published by UNCTAD in 2016 and 2017, in making a comparison of provisions dedicated to investment protection and the right to regulate, contained in different international investment agreements and bilateral investment treaties. RESEARCH RESULTS. In-depth analysis of CPTPP and CETA provisions that regulate foreign investments showed that these agreements contain unique and innovative provisions that could rarely be found in contemporary international investment agreements. These provisions not only clarify the foreign investor rights when carrying out activities on the territory of the host state, giving more detailed description of the states obligations and the guarantees provided, but also specify rules for the investorstate disputes settlement. DISCUSSION AND CONCLUSIONS. Both megaregional agreements, analyzed in the present article, contain extensive chapters devoted to achievement of maximum transparency in dispute settlement, while CETA introduces its own Investment Court System which includes a permanent appellate body. At the same time, the CPTPP Agreement for the first time, compared with already existent investment agreements, carves out a specific product – tobacco – from protection when settling investor-state disputes. Although neither CETA, nor CPTPP have yet been ratified by the parties, it is important to consider how these provisions on investment regulation would shape future international investment agreements and bilateral investment treaties.

1. Alvarez Jose E. Is the Trans-Pacific Partnership’s Investment Chapter the New “Gold Standard”? – Institute for International Law and Justice Working Paper. 2016. No. 3. 49 p. URL: https://wp.nyu.edu/megareg/wp-content/ uploads/sites/3134/2016/03/Alvarez_IILJ-Mega-Reg_2016-3.pdf (accessed date: 09.05.2018).

2. Benvenisti E. Democracy Captured: The Mega-Regional Agreements and the Future of Global Public Law. – GlobalTrust Working Paper Series. 2015. No. 8. 23 p. DOI: http://dx.doi.org/10.2139/ssrn.2646882

3. Chuvakhina L.G. CETA: novyi etap v razvitii otnoshenii Kanady i Evropeiskogo Soyuza [CETA: A New Stage in the Development of Relations between Canada and the European Union]. – Vestnik Astrakhanskogo gosudarstvennogo tekhnicheskogo universiteta. Seriya. Ekonomika. 2018. No. 1. P. 51–58. (In Russ.). DOI:10.24143/2073-5537-2018-1-51-58

4. Flynn S.M. [et al.]. The U.S. Proposal for an Intellectual Property Chapter in the Trans-Pacific Partnership Agreement. – American University International Law Review. 2013. Vol. 28. No. 1. P. 105–202. DOI: http://dx.doi.org/10.2139/ssrn.2185402

5. Gaukrodger D. The Balance between Investor Protection and the Right to Regulate in Investment Treaties: a scoping papers. – OECD Working Papers on International Investment. 2017. No. 2. 40 p. DOI: http://dx.doi. org/10.2139/ssrn.3147346

6. Gudkov I. Soglashenie o Transatlanticheskom torgovoinvestitsionnom partnerstve: ot zashchity ekonomicheskikh interesov investorov k zashchite suverennykh interesov prinimayushchikh storon? [Transatlantic Trade and Investment Partnership: from protecting the economic interests of investors to protecting the sovereign interests of the host parties?]. – Vsya Evropa. 2015. No. 10 (103). (In Russ.) URL: http://alleuropalux. org/?p=12248 (accessed date: 05.06.2018).

7. Hufbauer G.C. Investor-State Dispute Settlement. – Assessing the Trans-Pacific Partnership. Vol. 1: Market Access and Sectoral Issues. Peterson Institute for International Economics. 2016. P. 109–119. URL: https://piie.com/ system/files/documents/piieb16-1.pdf (accessed date: 15.08.2018).

8. Ispolinov A.S. Kuda idet sovremennyi investitsionnyi arbitrazh? [Where does the Modern Investment Arbitration go?]. – Rossiiskii yuridicheskii zhurnal. 2015. No. 3 (102). P. 80–96. (In Russ.)

9. Labin D.K. Mezhdunarodnoe pravo po zashchite i pooshchreniyu inostrannykh investitsii [International Law on Protection and Encouraging of Foreign Investments]. Moscow: Walters Kluwer Publ. 2008. 315 p. (In Russ.)

10. Lebedeva L.F. Transkontinental'nye partnerstva na pereput'e: faktory, riski, posledstviya [Transcontinental Partnerships at the Crossroads: factors, risks, consequences]. – Outlines of Global Transformations: politics, economics, law. 2017. Vol. 10. Issue 4. P. 54–69. (In Russ.). DOI: https://doi.org/10.23932/2542-0240-2017-10-4-54-69

11. Molchakov N.Yu., Yakunin V.I. Fenomen Trampa i amerikanskaya sistema razdeleniya vlastei [The Phenomenon of Trump and the American System of Separation of Powers]. – MGIMO Review of International Relations. 2018. No. 1. P. 42–62. (In Russ.) DOI: 10.24833/2071-8160-2018-1-58-42-62

12. Nottage L. The TPP Investment Chapter and Investorstate Arbitration in Asia and Oceania: assessing prospects for ratification. – Melbourne Journal of International Law. 2016. Vol. 17. Issue 2. P. 1–36. DOI: http://dx.doi. org/10.2139/ssrn.2767996

13. Puccio L., Harte R. From Arbitration to the Investment Court System (ICS): The evolution of CETA rules. 2017. 34 p. URL: http://www.europarl.europa.eu/RegData/etudes/IDAN/2017/607251/EPRS_IDA(2017)607251_ EN.pdf (accessed date: 05.06.2018).

14. Rachkov I.V. Kontseptsiya “zakonnykh ozhidanii inostrannogo investora” v praktike mezhdunarodnykh investitsionnykh arbitrazhei [Concept of “Legitimate Expectations” of Foreign Investors in the International Investment Arbitration Practice]. – Moscow Journal of International Law. 2014. No. 1 (93). P. 196–220. (In Russ.)

15. Rachkov I.V. Reforma mezhdunarodno-pravovogo uregulirovaniya sporov mezhdu inostrannymi investorami i gosudarstvami [Reforming International Resolution of Disputes between Foreign Investors and Host States]. – Mezhdunarodnoe pravosudie. 2016. No. 3 (19). P. 118– 136. (In Russ.). DOI: 10.21128/2226-2059-2016-3-118-136

16. Stephenson A., Carroll L. 2016. The Trans-Pacific Partnership. – The Investment Treaty Arbitration Review. Ed. by B. Legum. London: Law Business Research Ltd. 2016. P. 200–213.

17. Van Harten G. Reforming the System of International Investment Dispute Settlement. – Alternative Visions in the International Law on Foreign Investment: Essays in Honor of Muthucumaraswamy Sornarajah. Ed. by C.L. Lim. Cambridge: Cambridge University Press. 2016. P. 103–130.