Eu-china negotiations on investor state dispute settlement within the cai framework: are we on the right track?

This paper begins by presenting some of the main assessments of this controversial EU-China “agreement in principle”, and also weighs up the text’s chances of coming into force. The fact that, according to scholars, the bidirectional FDI flows between the EU and the PRC are still underdeveloped does not seem to be a good enough reason for all EU institutions to endorse its CAI approval on a political level. Section III reflects on the possible reasons why the Comprehensive Agreement, despite its name, did not cover an issue as essential as ISDS from the outset, instead relegating it to later negotiations between the two parties. Seven very diverse hypotheses are addressed by this paper on the above referred absence (ranging from a mere question of time to problematic unilateral strategies, and including bilateral decisions reached on the basis of various possible grounds). Section IV reflects on the possible content of the EU-China Agreement on Investment Dispute Settlement. A very wide range of possibilities opens up again at this point (a permanent standing two-tier mechanism with full-time adjudicators; a multilateral permanent appellate mechanism; a Sino-European mechanism for settling investment disputes; an Asia-centred dispute settlement mechanism linked to the Asian Infrastructure Investment Bank; existing Chinese-led arbitration mechanisms, and the enhancement of other ADR mechanisms). Section V deals with the fact that the BITs that China has signed with almost all EU countries in recent decades are applicable to the claims that Chinese and EU investors could raise before the entry into force of the EU-China IDS Agreement. This section also explains the negative consequences of this supposedly transitory situation and makes a case for completing the IDS negotiations promptly and effectively