Originally from Investment Treaty Arbitration and International Law - Volume 4

I. INTRODUCTION

Over the past twenty years, FDI inflows have expanded substantially, from approximately $40 billion at the beginning of the 1980s, to $200 billion in the 1990s, to over $1.5 trillion today.1 Throughout the last several years of growth, Asia has been the most attractive region for FDI among emerging markets.2 The FDI surge during the past few decades in the Asia-Pacific region was accompanied by similar growth in the region’s international investment agreement (IIA) network.3 Competition among States in the Asia-Pacific region for limited foreign investment put pressure on hopeful capital-importing governments to include robust investor protection in their IIAs to demonstrate their commitment to a positive investment climate. Asia-Pacific States now routinely draft their IIAs in the ever-growing shadow of one another and provide investors with protections comparable with agreements already in place within the region.4 Toward this end, States in the Asia-Pacific over the past several years have provided more detailed treaty language on a range of substantive and procedural obligations and have revised their negotiating models to reflect a growing consensus of common elements.5 In short, states in the Asia-Pacific are increasingly looking to robust substantive obligations and the availability of investor-state arbitration as a method of investment protection.6