Abstract
Bilateral and regional trade and investment treaties (FTAs and BITs) have proliferated worldwide, including within the Asia-Pacific region, along with double-tax treaties (DTTs). But countries like Australia have recently become more concerned about FTAs and BITs. This chapter examines processes that states can agree to, especially through commitments made in treaties before disputes arise, that are likely to minimize claims being filed or escalated and therefore to promote sustainable cross-border trade and investment in the field of financial services. It also considers adding commitments requiring or encouraging treaty partners to introduce new obligations on credit suppliers to notify national regulators where they detect unusually high levels of financial stress among borrowers and then for the regulators to share that information as an “advance warning” system for financial market stability.
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Notes
- 1.
- 2.
See generally e.g. Sornarajah (2012), via http://www.vcc.columbia.edu/content/fdi-perspective. See also e.g. Lazo (2014). www.transnational-dispute-management.com/article.asp?key=2037.
- 3.
See e.g. Kelsey (2010), p. 3.
- 4.
See Nottage (2013), pp. 452–474; https://www.ag.gov.au/tobaccoplainpackaging. The claim was eventually dismissed on jurisdictional grounds, for abusive ‘forum shopping’ under general international law principles, in 2015.
- 5.
Productivity Commission, Bilateral and Regional Trade Agreements: Research Report (13 December 2010), http://www.pc.gov.au/projects/study/trade-agreements/report. But see now Armstrong and Nottage (2016), http://ssrn.com/abstract=2824090.
- 6.
Department of Foreign Affairs and Trade, Australian Government, Gillard Government Trade Policy Statement: Trading our Way to More Jobs and Prosperity, archived at http://blogs.usyd.edu.au/japaneselaw/2011_Gillard%20Govt%20Trade%20Policy%20Statement.pdf.
- 7.
Nottage (2011a), http://ssrn.com/abstract=1860505; Trakman (2012), p. 83; Kurtz (2012), p. 65.
- 8.
Cf. e.g. the Japan-Korea BIT: Hamamoto and Nottage (2010), http://ssrn.com/abstract=1724999.
- 9.
Nottage (2016), http://ssrn.com/abstract=2767996.
- 10.
Nottage (2015a), p. 245.
- 11.
Burch and Nottage (2011), p. 128.
- 12.
See, e.g., Japan-Indonesia Economic Partnership Agreement (art 73(4)). A watered-down variant can be found in Chapter 11 of AANZFTA, which provides in Art 25 (emphasis added):
6. Where an investor claims that the disputing Party has breached Article 9 (Expropriation and Compensation) by the adoption or enforcement of a taxation measure, the disputing Party and the non-disputing Party shall, upon request from the disputing Party, hold consultations with a view to determining whether the taxation measure in question has an effect equivalent to expropriation or nationalization. Any tribunal that may be established pursuant to this Section shall accord serious consideration to the decision of both Parties under this Paragraph.
- 13.
Rather similarly, domestic and international contract law protects ‘third party beneficiaries’ of agreements between parties who subsequently wish to alter rights accorded to such third parties. See, e.g., UNIDROIT Principles of International Commercial Contracts art 5.2.5 (‘The parties may modify or revoke the rights conferred by the contract on the beneficiary until the beneficiary has accepted them or reasonably acted in reliance on them‘); Property Law Act 1969 (WA) s 11(3), Property Law Act 1974 (QLD) s 55(3)(d); Draft Proposal [3.2.16.09] of the Japanese Civil Code (Law of Obligations) Reform Commission, http://www.shojihomu.or.jp/saikenhou/English/draftproposals.html#Book3ch6.
- 14.
- 15.
See Nottage (2015b), p. 185.
- 16.
Cf. generally Vogel (1995). For another example of how consumer protection law is improving despite greater liberalization of trade and investment, see Nottage and Thanitcul (2016), p. 1 (manuscript at http://ssrn.com/abstract=2703130).
- 17.
See further Burch et al. (2012), p. 1013.
- 18.
- 19.
Nottage (2011b), p. 3.
- 20.
Nottage (2014), p. 114 (with a longer version at http://ssrn.com/abstract=1509810).
- 21.
- 22.
See Harrison and Gray (2012), p. 15, http://www.consumeraction.org.au/downloads/ProfilingforProfit-final-formatted.pdf; and more generally Sexton (2012), http://www.smh.com.au/business/every-click-you-make-theyll-be-watching-you-20120713-221ay.html.
- 23.
For example, the growth of Japan’s unsecured credit market (until re-regulation in 2006) was partly fueled by large-scale investments by US firms such as GE Money and their ‘sweat box’ business model. See Kozuka and Nottage (2009), p. 199.
- 24.
Williams (2012). Compare also Davis (2011), http://www.apec.org.au/docs/11_CON_GFC/Regulatory%20Reform%20Post%20GFC-%20Overview%20Paper.pdf. For significant reforms in national law and administration across several developed countries, however, see Fairweather et al. (2017).
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Acknowledgments
The original version of this chapter drew on research for the project entitled “Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific,” supported by the Australian Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade. The present version draws on an Australian Research Council Discovery Project grant (DP140102526) into international investment dispute management. The views remain personal to the author.
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Nottage, L. (2017). Free Trade Agreement and Investment Treaty Innovations to Promote More Sustainable Financial Markets for Consumers. In: Lima Marques, C., Wei, D. (eds) Consumer Law and Socioeconomic Development. Springer, Cham. https://doi.org/10.1007/978-3-319-55624-6_13
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