On 23 October 2023, the Council of the European Union adopted a regulation known as the Anti-Coercion Instrument (ACI), a new trade instrument which will enable the European Union (EU) and its Member States to respond to so-called ‘economic blackmail’ from foreign countries that seek to influence or coerce the EU or a particular Member State to adopt or to decline a specific policy.  The European Parliament had already approved the regulation earlier this month by a margin of 578 votes to 24 and only 19 abstentions.

The ACI breaks new ground in the EU’s arsenal of trade defences in the midst of escalating geopolitical tensions.  It is designed to deter perceived economic coercion primarily through diplomacy and, if necessary, with countermeasures in a wide range of fields, including international trade, investment, and funding.  It is also aimed to secure ‘reparation’ for the injury caused by a third country’s conduct.  The ACI is expected to enter into force before the end of 2023 and will take the form of a regulation binding in its entirety and directly applicable to all Member States.Continue Reading European Parliament and Council Adopt New Trade Instrument to Defend European Interests from Economic Coercion

On 7 July 2023 the European Commission published a formal proposal for the withdrawal of the European Union (EU) from the Energy Charter Treaty (ECT or the Treaty).  The move comes after many years of intensive efforts (notably by the EU) to modernize the ECT, in response to concerns that the Treaty prevented ECT Contracting States from meeting their climate change mitigation obligations as set out in the Paris Agreement.  The European Commission’s current proposal leaves much to be desired in terms of clarity and legal certainty.  Energy companies covered by the ECT should therefore be well-advised to explore alternative sources of protection to ensure that their investments enjoy adequate coverage in case of disputes.Continue Reading We’ll always have Paris? European Commission formally proposes the withdrawal of the European Union from the Energy Charter Treaty, invoking the Paris Agreement

On February 21, 2023, the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP) formally entered into force for Chile, after undergoing an intense, four-year legislative process.  The CPTPP covers the full range of modern trade agreements, including market access for goods and services, public procurement disciplines, temporary entry, and investment protection, among others.  Despite the CPTPP’s entry into force, the future of investor-State dispute settlement (ISDS) in Chile remains a point of controversy.Continue Reading The CPTPP Enters into Force for Chile – but Mind the Fine Print

Canadian, Mexican and United States investors considering bringing a claim under the North American Free Trade Agreement (NAFTA) against a NAFTA State Party should be aware that the three-year window for notifying their claim will soon come to an end.  They must therefore take quick action to notify their claim by the end of March 2023 to be in a position to submit their request for arbitration before July 1, 2023, the final deadline for the submission of legacy NAFTA investment claims.

The NAFTA was terminated on July 1, 2020, with the entry into force on that same date of the United States-Mexico-Canada Agreement (USMCA). The USMCA Parties recognized the importance of a smooth transition from the NAFTA to the USMCA, particularly with regard to investors who had invested on the understanding that NAFTA’s Chapter Eleven (Investment) protections would be in place.  Annex 14-C of the USMCA therefore maintains NAFTA provisions on the protection and promotion of legacy investments for a period of three years post entry into force of the new agreement.  These provisions are consistent with the practice of Canada, the United States, and Mexico to provide a sunset period for investment protection under their bilateral investment agreements. Continue Reading The Window for Putting a USMCA State Party on Notice of a NAFTA Legacy Investment Claim Closes at the End of March