The online rumour mill has seen a flurry of articles coming out regarding the possible agreement to insert an Investor-State Dispute Settlement (ISDS) clause into the Trans Pacific Partnership (on the back of further leaked documents).
This is particularly interesting owing to the Minister for Trade and Investment, Andrew Robb AO MP’s ambivalent views on altering Australia’s long held position of rejecting such a clause in bilateral trade agreements.
Views on the benefits of ISDSs have long been debated, with detractors arguing that such clauses permit corporate entities the right to challenge legally formed legislation. Proponents argue that the positive investment benefits arising from giving a protection mechanism for large multinationals outweigh these risks, and further point out that an ISDS clause is often a pre-requisite in free trade agreements.
The inclusion of such a clause could also have a wider implication on arbitrations within the Asia Pacific region. The TPP negotiations also suggest Australia agreeing to USA style IP regulations, stricter copyright rules, as well as possible regulations on internet freedoms.