As noted in the last post, Australia has announced that it no longer wants any part of investor-state dispute settlement. This is not a total surprise, of course, given its past opposition to investor-state in the U.S.-Australia FTA. Nonetheless, such a strong and formal renouncement of investor-state is noteworthy. Not wanting U.S. investors to bring complaints against the Australian government under the U.S.-Australia FTA was one thing. Abandoning investor-state altogether in future trade agreements with any and all countries -- even with developing countries, where Australia would presumably be the main beneficiary -- goes much further.
So what does this mean for investor-state provisions in the Trans Pacific Partnership (TPP)? The countries who are part of the negotiations are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. If Australia opts out of investor-state in the TPP negotiations, how will the others approach the issue? Presumably, the provisions can be drafted so that they apply only to the other countries involved. So, you could just have an investor-state mechanism that applies to everyone but Australia. Is there any precedent for this kind of country limit on investor-state participation? I'm not aware of it, but it shouldn't be too hard to work out the necessary provisions.
One key question: Will any of the other countries be influenced by Australia's change in view? The U.S. is almost certain to maintain its current position. Will any of the other countries involved get cold feet now as a result of Australia's decision? Of interest here is the position of New Zealand. New Zealand has been back and forth a little. At one point, they seemed maybe to want to avoid investor-state, although the latest statement on the matter seems to indicate they are pro-investor-state. But will the views of their good friends the Australians affect them?
As a final point, I'm curious about what makes Australia different from other countries. In most rich countries, there seems to be a good deal of opposition to investor-state among various advocacy groups. Despite this, however, the dominant position within the government in these countries favors investor-state (although there is sometimes a vocal minority opposed). How did the anti-investor-state position prevail in Australia? This would be an interesting topic for a paper, if anyone is looking.
