Originally from the Boundaries of Investment Arbitration

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A. INTRODUCTION 

A number of commentators have suggested that the worlds of trade and investment are “on parallel tracks headed in the same direction.”  In the words of Roger Alford:

[T]he trade and investment arbitration regimes routinely overlap and are increasingly converging. They promote similar objectives—globalization, economic integration, trade promotion, and investment protection. They are often embedded in the same treaties, such as part of preferential trade agreements. They incorporate similar substantive protections, particularly the rules against discrimination and protectionism. They both use international tribunals as the vehicle for dispute settlement, thereby allowing for judicial review of sovereign state violations of international law. As of late, they both use the economic leverage of tariff benefits to secure compliance with adverse judicial decisions. They both are on the ascendance, with countries clamoring to reap the rewards of membership in each club. 

In a book devoted to the proposition that trade and international investment law are, despite “pathologies of divergence” nonetheless “converging systems,” Jürgen Kurtz advances many impressive reasons for conclusions that complement Alford’s above. His five “powerful factors” pushing the regimes together include: first, the fact that the trade and investment regimes share a “common telos,”  that is, both extend their protections to services and intellectual property, both seek to discipline performance requirements, and with respect to this common legal terrain, both share “micro-norms” designed to promote equality of competitive opportunities between foreign and domestic producers of goods, services and creators of intellectual property as well as to permit flexibilities for state regulation.