When I saw today's FT story about a number of Indian states banning Coke and Pepsi because a scientific study had shown that they contained as much as 24 times the amount of permitted pesticide residues, and saw that the soft drink makers had argued that they comply with international standards, my first thought was "why is there not an SPS-type agreement for investment?" (I express no opinion on whether the ban is a good idea.) Then, I remembered that I had written a paper answering this question.
FDI and the Right to Regulate: Lessons from Trade Law, in United Nations Conference on Trade and Development, The Development Dimensions of FDI: Policy and Rule-Making Perspectives (Americo Beviglia Zampetti & Torbjörn Fredriksson, eds. 2003), available at http://www.unctad.org/en/docs/iteiia20034_en.pdf.
The general, political economy-based answer seemed to me at that time to be that there is less risk of protectionism in investment than in trade. Investment includes local jobs and other links, while trade does not (so much). But I wonder whether there is any data supporting that view?
