From Anne van Aaken and Jürgen Kurtz, a brief paper entitled "THE GLOBAL FINANCIAL CRISIS: WILL STATE EMERGENCY MEASURES TRIGGER INTERNATIONAL INVESTMENT DISPUTES?" From the conclusion:
We draw two tentative conclusions, implicated in our analysis of potential liability under international investment treaties. First, there is clear evidence of widespread discrimination directed at foreign actors in the laws we have surveyed despite the public commitment of state parties to free market principles, including the rule of law, respect for private property, open trade and investment and competitive markets, expressed at the G20 meetings. This is not confined to any individual state or select grouping; it is a marked characteristic of emergency responses to the financial crisis across a significant proportion of the globe. This then is a timely reminder to revisit the lessons associated with the outbreak of protectionism leading to the Great Depression in the interwar period. Protectionism is the result of a prisoner’s dilemma understood in game theory terms. Cooperation would make every state better off, but it is individually rational for states to pursue their self-interest (and protect domestic industry) at least in the short term. While protectionist instincts are now more nuanced, it is difficult to escape the conclusion that states are failing to cooperate in the current crisis, with possible cascading consequences.
This leads to our second, tentative concern, namely whether international law will fulfill a key function in the contemporary period. The framers of the post-Second World War architecture of international economic law were deeply influenced by the lessons of the interwar period. They had drafted rules hoping to embed a loose form of cooperation and constrain the freedom of states to resort to shortterm protectionist measures. The preparedness and rapidity by which states are now moving in that direction raise serious questions of whether our existing system is a sufficient check against these problematic tendencies.
With regard to their first concern, embedding protectionism within some other policy measure is always frustrating for trade folks. We often try to explain that trade rules don't prevent the other policy measure. You just can't adopt these measures in a way that is discriminatory. But that message is sometimes hard to get across and many people come away thinking that trade (and investment) rules prevent the other policies.
