The Brave New (American) World of International Investment Law: Substantive Investment Protection Standards in Mega-Regionals

Mega-Regionals are transforming and shaping the future of international investment law, concerning both the settlement of investment disputes and the substantive disciplines governing investor-state relations. Focusing on the latter, the present article shows how Mega-Regionals depart from the so far dominant European model of investment protection by going beyond crudely worded post-establishment protections for foreign investment. Instead, Mega-Regionals pursue the twin policy goals of investment liberalization through greater market access commitments and strengthening state control by ensuring host governments sufficient space to regulate in the public interest. In light of these policy goals, and considering the deeper reasons for structural changes to the investment rules in Mega-Regionals, the article argues that the models and conceptual foundations of Mega-Regionals build on prototypes first developed in the context of U.S. and NAFTA investment practices. This suggests that the future of international investment law will be shaped to a considerable extent against the background of U.S. experiences, rather than be forged anew by the mechanics of international diplomacy and negotiation.