A Battle for Choice: Selecting Investor-State Arbitrators Under the RCEP
By Spenser Karr [PDF]

States face many choices when negotiating trade agreements. The substantive considerations in trade agreements are numerous and can range from the large-scale considerations like the scope of the agreement to more minute details such as which sectors of industry will receive favorable tariff treatment and how favorable that treatment will be. However, states traditionally have put off some choices until the future. When treaties cover international investment, they almost always save for later the selection of arbitrators who will oversee disputes. The decision to choose arbitrators only after a dispute has occurred is supported by tradition and logic. The specific nature of a conflict cannot be known until that conflict has arisen. In recent years, however, multiple parties have expressed concern about the potential for conflicts and bias that are allegedly perpetuated by this system and, accordingly, have argued for change.

A leaked draft of the Regional Comprehensive Economic Program (RCEP), a Southeast Asian trade treaty created by states whose population represents nearly half the global total and who combine to make up nearly forty percent of the global trade market, adopted one proposed change. The RCEP has rejected tradition and boldly embraced one idea from reformers: creating a preselected list of potential arbitrators who will oversee all future trade disputes. This Comment contends that this idea will undermine the purposes of the international investment regime and weaken one of its main pillars of support: investor-state dispute settlement (ISDS). By diverging from tradition, the RCEP member states are weakening a treaty that otherwise shows great potential to transform trade relations in the region.

Spenser Karr is a J.D. Candidate at Temple University Beasley School of Law, Class of 2018.