The Treaty of Lisbon and Foreign Investmen: Crowning a New King? An Early Assessment of the Treaty of Lisbon's Impact on the Distribution of Foreign Investment Policy Powers Between the EU and its Member States.

When the much-debated Treaty of Lisbon finally came into force on the 1st of December 2009, it introduced “foreign direct investment” as a new explicit competence within the European Union’s (“EU”) Common Commercial Policy (“CCP”). Albeit heartily welcomed by, inter alia, the European Commission, this extension of the EU’s exclusive external powers is not unproblematic. The most fundamental issue is that Article 207(1) of the Treaty on the Functioning of the European Union (“TFEU”) leaves considerable leeway for different interpretations on the scope of the Union’s new foreign investment policy powers. Another issue that the expansion of the CCP brings to the fore is the fate of the Member States’ network of existing investment commitments: will the Member State be able to uphold the vast amount of bilateral investment agreements (“BITs”) that they have concluded individually before the coming into force of the Treaty of Lisbon without contravening their duties under EU law or are they under an obligation to amend or terminate these agreements to ”make room” for the exercise of the EU’s newly-introduced treaty-making power? The main conclusion of this paper, which deals with both of the aforementioned issues, is that the Members States will retain key powers in the field of international investment despite the widening of the CCP. In more detail, it is submitted that Article 207(1) TFEU does not cover foreign portfolio investment. Further, there are arguments that suggest that policies on investment protection will not fall within the ambits of the amended CCP. The validity of these arguments, however, is subject to debate and it might ultimately be a matter for the European Court of Justice to decide whether Article 207(1) TFEU covers investment protection or not. When it comes to the Member States’ existing BITs, I argue that the coming into force of the Treaty of Lisbon does not render the agreements in question invalid, nor impose a general obligation on the part of the Member States to terminate or amend them. Indeed, it is incumbent upon the Member States to take necessary steps to remove any incompatibilities that might arise between their BITs and EU law, but this more specific amendment obligation was applicable already under the Treaty of Nice. Moreover, there is nothing that suggests that the risk of conflicts between the Member States’ existing BITs and EU law would be greater under the Treaty of Lisbon than before its entry into force