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Modernising key provisions in IIAs

The increasing number of investor-State dispute settlement (ISDS) cases has not only heightened the profile of IIAs but also brought to light their unanticipated – and partially undesired – side effects. The arbitral interpretation process has created a new learning environment for countries. Issues of predictability, policy space and sustainable development have come to the forefront of the debate. So has the objective of ensuring coherence between IIAs and other areas of public policy, including policies to address global challenges such as the protection of the environment or public health and safety. Finally, the underlying dynamics of IIA rulemaking have changed. A rise in South–South FDI flows and emerging economies’ growing role as outward investors – also vis-à-vis the developed world – are beginning to alter the context and background against which IIAs are being negotiated.

IIA obligations have been growing in sophistication, with a number of countries working to create clearer and more balanced agreements. Due to the fragmented nature of the IIA regime, the new elements are scattered among numerous recent IIAs and model BITs. UNCTAD has been monitoring relevant developments and analysing the rationales for, and implications of, the novel approaches. This work is aimed at enabling governments to identify policy options that best suit their needs, preferences and objectives.

UNCTAD is following closely the relevant developments. See: