Renegotiating International Investment Law

Abstract

All over the world, states are renegotiating international investment agreements at a rapid clip. Largely unnoticed, clauses in investment agreements that authorize or mandate renegotiation under specified conditions have facilitated these efforts. This article is the first to describe and analyze the variation in these renegotiation clauses. We develop a typology of renegotiation clauses in which such clauses vary along two dimensions. They range on a continuum from a full commitment to renegotiate to only a partial commitment. Renegotiation clauses can also call for full scope renegotiation or partial scope renegotiation. The literature on renegotiating international agreements has heretofore overlooked the existence and purposes of provisions requiring partial scope renegotiation. Partial scope renegotiation represents a departure from the 'single undertaking' model of negotiations common to international economic law. By altering both the scope of, and commitment to, renegotiation, parties can conclude agreements today while deferring resolution of difficult issues to the future. At the same time, they can also constrain the possibility of opportunism by limiting the subject matter under renegotiation. Most importantly, partial scope renegotiation offers a method to reduce the critical tension underlying the modern international economic order: the pace and degree to which non-Western style economies are required to liberalize their markets.