Investment Rules and the New Constitutionalism

Abstract

The new model for economic and political renovation mandates the entrenchment, beyond the reach of majoritarian control, of rules for the free movement of transnational capital. This “new constitutionalism” removes key aspects of economic life from the influence of domestic politics within nation states. A manifestation of this new orthodoxy is the network of bilateral investment treaties designed to ensure foreign investors security from “discrimination” and “expropriation,” and conferring standing on investors to sue in the event that their investment interests are impaired. This paper examines the agency of the state in promoting this self‐binding regime of investment rules and its potential impact on domestic constitutional regimes. Of particular concern here are constitutional arrangements that protect property, such as that recently enacted in the Republic of South Africa, that deviate from the norms expressed in the transnational investment‐rules regime.

Constitutional Approaches to Privatization: An Inquiry into the Magnitude of Neo-Liberal Constitutionalism

“…143 In addition, there are substantive constraints on state parties including protection from expropriations and nationalizations (or measures having equivalent effect), the ability to enforce these obligations by foreign investors themselves, and mechanisms for the settlement and adjudication of disputes before international trade tribunals and domestic courts. 144 These same obligations are virtually replicated in NAFTA's investment chapter. 145 It is significant that investment agreements can now be enforced by foreign investors against state parties.…”

Panama and the WTO: new constitutionalism of trade policy and global tax governance

“…Yet curiously, this theorizing almost invariably associates democratic politics with national sovereignty, as popular sovereignty is taken as a manifestation of democratic powers (Schneiderman 2000). Nonetheless the opposite can be the main concern in taxation issues.…”

“…These notions point to the significance of the role of arbitration specialists not only in traditional trade issues (Schneiderman 2000), but also as gatekeepers in trade disputes whose outcomes can either promote or hinder policies against tax avoidance, tax evasion and tax havens. Looking at the myriad of different ways trade policies have influenced or can influence tax policies through WTO, EU and other channels, it would be a grave oversimplification to say that these developments would have outright separated 'the "economic" from the "political" and "locked in" already-adopted free market policies through use of legal guarantees and sanctions to favour private determination of economic policy' (Gill 1998b, 25).…”

“…However, we need to go deeper than this. Here, it is useful to analyze trade policy as an expression of 'new constitutionalism' (Raghavan 1990;Schneiderman 2000). The concept was coined for theorizing the globalization of a given market discipline, which restrained the capacity of nation-states to control the powers of international capital.…”

Transnational Comparisons: Theory and Practice of Comparative Law as a Critique of Global Governance

“…81 Another development in transnational law making is of great significance in assessing the prospects of comparative constitutional law. The 'emergence of private authority in global governance' 82 -as expressed in a variety of areas 83 including standardization 84 and the lex mercatoria 85 -constitutes a considerable challenge for constitutional thought. These regulatory regimes in the transnational arena reflect, on the one hand, on a fundamentally changed role of the state in the exercise of 'public' authority 86 , the origins of which have to be seen, firstly, in a transformation of the inter-national context 87 and in the inner-state shift 'from government to governance.'…”