The European Union and Vietnam today finalised talks for a free trade agreement (FTA), marking the end of the negotiating process. After the agreement in principle reached in August, today’s announcement follows the successful resolution of the few remaining issues on the table.
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Vietnam has also agreed to accept the EU's new approach on investment protection – in particular a permanent investment dispute resolution system with an appeal mechanism.
The FTA text has not been released yet, as far as I can see. But if the ISDS provisions in the EU-Vietnam FTA really do reflect the EU's new Investment Court System (ICS), that would be an intriguing development. The battle over what ISDS should look like has led to a wide range of varying provisions in the thousands of investment treaties around the world. As always, complexity means lawyers are the big winners!
Of course, it may be a while before the EU-Vietnam FTA actually takes effect. We are still waiting on the CETA and the EU-Singapore FTA. Vietnam might have to stand in line a bit.
Note that the Commission doesn't refer to ISDS at all, whereas I keep using the term. Is the old ISDS really all that different from the new ICS? Can't we use the same term to describe it? Even under ICS, there are still investors and states settling disputes, aren't there?
And then there's the question of the yet to be ratified pre-ICS FTAs that still have old ISDS rules in them, such as the CETA and the EU-Singapore FTA. Can those really be ratified as currently written, when the new and improved version of ISDS is out there, being sold as a better alternative?
As a final point, the use of FTAs by major economies such as the U.S. and EU to promote their policy agendas -- here, a revised ISDS -- is interesting. Have people been writing about this? If not, they should!