The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS 

Jürgen Kurtz: The Mfn Standard and Foreign Investment—An Uneasy Fit?

This article examines recent arbitral jurisprudence applying the most-favoured-nation (Mfn) treatment standard in various investment treaties. It does so by firstly comparing the strong economic and political case for the use of the Mfn standard against trade discrimination with its more recent transport into the nascent international law of investment. The article puts forward three fundamental historical, normative and systemic differences between Mfn treatment as it appears in the General Agreement on Tariffs and Trade and in investment treaties. The underlying thesis is that these differences translate into a far greater potential for the Mfn standard in investment treaties to impinge on the regulatory autonomy of host States. The article concludes by offering suggestions on interpretative mechanisms through which to balance an ordinary reading of the broad nature of most Mfn provisions whilst guarding against undue intrusion into regulatory autonomy.

Jürgen Kurtz is a Lecturer at the Law School of the University of Melbourne, Australia; and Grotius Fellow at the Law School of the University of Michigan, Ann Arbor.

Rolf J. Langhammer: Revealed Comparative Advantages in the Services Trade of the United States, the European Union and Japan—What Do They Tell Us?

This article argues that measurements of revealed comparative advantages (Rcas) in international trade in services cannot be straightforwardly compared to Rcas in trade in goods. The essential difference is that services are internationally exchanged not only by cross-border trade, mainly subject to relative resource endowment, but also by factor movements (primarily foreign direct investment). The latter modes of supply are determined by characteristics of services such as the need for close producer-consumer proximity. In addition, the policy influence in Rcas for trade in services is not dominated by border measures but by a variety of domestic regulations. The article presents measurements of Rcas for U.S., EU and Japanese services trade and shows strengths on the U.S. side and weaknesses on the Japanese side, with the EU in-between. Finally, measuring Rcas for U.S. services trade in two different modes of delivery (cross-border trade and commercial presence) yields similar results in some services sectors but not in all.

Rolf J. Langhammer is Head of the Research Department “Development Economics and Global Integration” and Vice-President of the Kiel Institute for World Economics, Kiel, Germany; and Honorary Professor for "Development Economics and International Economic Relations" at Kiel University.

Zeyad A. AlQurashi: Indirect Expropriation in the Field of Petroleum

State measures affecting foreign investment in an indirect manner pose a special difficulty from the standpoint of what constitutes an expropriation and how significant a State measure must be to constitute a taking for which compensation should be paid. These questions have bedeviled governments, international tribunals and international lawyers. The importance of this question lies in the fact that some forms of indirect expropriation, while leaving the investor as the official owner of the investment, nevertheless leave him with nothing except the empty name of ownership. The aim of this article is to address the question of what kind of interference short of an outright taking constitutes expropriation. The article also attempts to examine how this question has been addressed by the international arbitral practice relating to the petroleum industry. In doing so, a number of recent arbitral awards rendered under both the North American Free Trade Agreement and some bilateral investment agreements are considered.

Zeyad A. AlQurashi is Assistant Professor of Law at King Abdulaziz University, Saudi Arabia; and Research Fellow at the Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee, Scotland.

Robert Wisner and Nick Gallus: Nationality Requirements in Investor–State Arbitration

Understanding the nationality requirements that an investor must satisfy before it can bring a claim against a State is vital for companies investing overseas and the lawyers advising them. Investors who have already suffered damage need to know if they have standing to claim under an investment treaty or contractual arbitration clause. Just as importantly, corporate investors need to know if they can structure their corporations to take advantage of such treaties and clauses. The acceleration of investor–State arbitration in recent years has clarified the circumstances in which an investor satisfies the nationality requirements. Drawing from recent decisions, such as Champion Trading v. Egypt, Loewen v. The United States of America and Tokios Tokeles v. Ukraine, the article discusses these requirements as they apply to both natural and corporate claimants, identifying the issues on which tribunals agree and those that are still uncertain.

Robert Wisner is Counsel at Appleton & Associates, International Lawyers, Toronto, Canada, which specializes in investor–State arbitration.

Nick Gallus is an Associate at Appleton & Associates, International Lawyers, Toronto, Canada.

Xinjie Luan: How Future Trade Wars Will Be Carried On—The Trade Retaliation Mechanism and the Anticipated Application thereof under the Revised Foreign Trade Law of China

The revised Foreign Trade Law of the People’s Republic of China came into force on 1 July 2004. In that revision, however, China’s trade retaliation provisions underwent no material change. The formation and development of China’s trade retaliation mechanism are based on its particular economic and cultural backgrounds. Because the rules relating to the establishment of “appropriate” or “equivalent” counter-measures under the World Trade Organization’s Understanding on the Settlement of Disputes are not so clear-cut as to be implemented effectively, whether or not to retaliate is entirely at the complainant’s disposal. Rational compromise and concession, rather than the quondam “tit-for-tat” contest in future trade disputes will surely aid in the economic renaissance of China.

Xinjie Luan is Guest Research Fellow of the China Institute for Wto Studies at the University of International Business and Economy in Beijing; and Associate Professor and Executive Director of the Wto Law Institute at Weifang University in Weifang City, Shandong, People’s Republic of China.

Gbenga Oduntan: Africa before the International Courts—The Generational Gap in International Adjudication and Arbitration

Controversy persists as to whether or not international law is Eurocentric in nature and international relations are stacked against the interests of developing States in general and African States in particular. This article examines these issues and seeks to prove that there are grave inequities in the established systems of international adjudication and arbitration. It does so by examining the record of the two foremost international courts—the International Court of Justice and the Permanent Court of Arbitration. In particular, the article offers a detailed analysis of their jurisprudence in relation to two recent disputes involving African States—the Case concerning the Land And Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea Intervening) and the Decision Regarding the Delimitation of the Border between The State of Eritrea and the Federal Democratic Republic of Ethiopia. The article concludes that the international law espoused and practiced by the leading international courts and tribunals is no more than a means of maintaining the sanctity of past colonial acts and solidifying the continuing interests of the older and more developed States.

Gbenga Oduntan is Lecturer in Law at Canterbury Christ Church University College in Canterbury, U.K.; Sessional Lecturer in International Law, Constitutional and Administrative Law at Kent Law School, University of Kent at Canterbury, U.K.; and Legal Adviser to the Nigerian Government and Member, United Nations–Nigerian/Cameroon Mixed Sub-Commission on the Demarcation of the Boundary between Nigeria and Cameroon.