Last week, I wrote in praise of the China - Australia FTA (ChAFTA) ISDS provisions, suggesting that they were narrower in scope than typical ISDS provisions, in a good way. I liked the fact that they left open whether to incorporate expropriation and minimum standard of treatment provisions, leaving that to a "future work program."
In the comments to that post, Elizabeth Sheargold raised the point that perhaps an existing China - Australia BIT explained this openness, as these provisions were already in effect under that BIT. I took a quick look at the BIT, and it was a little unclear to me just how enforceable it was, but she may be right.
Now I see this from Kyla Tienhaara and Gus Van Harten:
In a bizarre move, the Abbott Government has signed a treaty before it has finished negotiating key aspects of it. The investment chapter of the China-Australia Free Trade Agreement, signed in Canberra on Wednesday, is missing many provisions that have created controversy in other FTAs. Instead, the Government has agreed to set up a committee that will, in the future, negotiate these provisions.
What does it mean? It seems the ChAFTA may eventually contain problematic clauses on "indirect expropriation" and the "minimum standard of treatment" – which are frequently used by investors to challenge public health and environmental measures – but Parliament will not be able to scrutinise them before ratifying the deal.
My assumption was that leaving these issues to a "future work program" would likely mean they would disappear into bureaucratic oblivion. By contrast, Tienhaara and Van Harten fear they will be concluded in the future, with no oversight from anyone. Would that be possible? Could you have a trade or investment treaty where you sign off in advance on future provisions? Dispute settlement is sort of like that: You agree to be bound by future "clarifications." It could also apply to interpretations by the parties. But applying this concept to negotiated provisions that are brand new seems very different.
