Bilateral Investment Treaty Negative

Bilateral Investment Treaty FASD Elliot Grizzard & Preston Black
Negative Region IX Clark/Grizzard & Black/Thomas

Bilateral Investment Treaty Negative
By: Elliot Grizzard & Preston Black
Openers...................................................................................................................................................................................... 4
Generic....................................................................................................................................................................................... 5
A) Definitions: Clarification.................................................................................................................................................5
B) Methodologies...............................................................................................................................................................6
C) Tables............................................................................................................................................................................. 7
D) Source Indictments.........................................................................................................................................................9
Topicality – Reform.................................................................................................................................................................. 11
A) Standards...................................................................................................................................................................... 11
B) Definitions.................................................................................................................................................................... 11
C) Interpretation...............................................................................................................................................................11
D) Violation....................................................................................................................................................................... 11
E) Impacts......................................................................................................................................................................... 12
Solvency 1: Alt Cause – Financial Policy....................................................................................................................................13
A) Financial Policy.............................................................................................................................................................13
B) Tax System.................................................................................................................................................................... 14
C) Impact: Zero Positive Effect..........................................................................................................................................15
Solvency 2: Russia Won’t Ratify................................................................................................................................................16
A) Russia Doesn’t See the Point........................................................................................................................................16
B) Impact: Russia Won’t Ratify..........................................................................................................................................17
Solvency 3: Alternative Evidence  FDI Ø ↑..........................................................................................................................18
A) General: Alternative Evidence Proves...........................................................................................................................18
B) Alt Ev 1: Political Risk Ratings.......................................................................................................................................19
C) Alt Ev 2: Political Risk Insurers......................................................................................................................................20
D) Alt Ev 3: Investor Knowledge & Appreciation...............................................................................................................22
E) Impact: FDI Ø ↑...........................................................................................................................................................24
F) Response – Formal Law Ø Impact Commercial Affairs..................................................................................................25
G) Response – “Investors Should Care” is Irrelevant.........................................................................................................26
Solvency 4: Law & Society Empirics  FDI Ø ↑.......................................................................................................................27
A) General: Law & Society Empirics Prove........................................................................................................................27
B) Empiric 1: Legal Ignorance............................................................................................................................................28
C) Empiric 2: Legal Pluralism.............................................................................................................................................29
D) Empiric 3: Legal Ambiguity...........................................................................................................................................30
Page 1 of 75
E) Impact: Investment Decisions Ø Effected.....................................................................................................................31
IPR Disadvantages – Uniqueness and Link................................................................................................................................32
A) Uniqueness: Russian IPR Enforcement Bad Now..........................................................................................................32
B) Internal Link: BITs Enhance IPRs...................................................................................................................................33
C) Internal Link: Plant and Animal Patents........................................................................................................................34
Disadvantage 1: Capital Controls..............................................................................................................................................35
A) Link: Russian Economic Recovery.................................................................................................................................35
B) Internal Link: Outdated Capital Controls......................................................................................................................36
C) Link: Decreased Policy Space........................................................................................................................................38
D) Brink: Economic Recovery............................................................................................................................................39
E) Response – Historical Precedent – Russian Capital Account Convertibility..................................................................41
F) Response – Historical Precedent – Chilean Encaje.......................................................................................................42
G) Response – Historical Precedent – Malaysian Capital Controls....................................................................................43
H) Impact 1: Anti-American Backlash................................................................................................................................44
I) Impact 2: Anarchy.........................................................................................................................................................45
J) AT: NPM Clause............................................................................................................................................................46
K) AT: Not Russia Specific..................................................................................................................................................46
L) AT: Not Current Crisis Specific......................................................................................................................................46
Disadvantage 2: Drug Access....................................................................................................................................................47
A. Link: Drug Access Denied..............................................................................................................................................47
B. Impact 1: Death............................................................................................................................................................49
C. Impact 2: Public Health.................................................................................................................................................50
D. Implication: Human Rights...........................................................................................................................................51
AT: Pharmaceutical Innovation.............................................................................................................................................52
AT: Exemptions..................................................................................................................................................................... 53
AT: Compulsory Licensing.....................................................................................................................................................54
Disadvantage 3: Food Sovereignty...........................................................................................................................................55
A. Link: GMOs are Patented..............................................................................................................................................55
B. Link: Farmers put out of business.................................................................................................................................56
C. Impact: Food Sovereignty.............................................................................................................................................58
1. Food Sovereignty Violated........................................................................................................................................58
2. Food Sovereignty is a Human Right..........................................................................................................................60
Disadvantage 4: Innovation......................................................................................................................................................61
A. Link: Innovation Destroyed...........................................................................................................................................61
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B. Impact 1: Injustice........................................................................................................................................................63
C. Impact 2: Life Saving Research Hindered......................................................................................................................64
D. Refutation: Historical Precedent  Italy......................................................................................................................65
E. Refutation: Historical Precedent  Silicon Valley........................................................................................................67
Disadvantage 5: Freedom of Information Violated..................................................................................................................68
A) Internal Link: Indigenous Rights Implicated..................................................................................................................68
B) Internal Link: Economic Reforms Implicated................................................................................................................69
C) Internal Link: Right to Water Implicated.......................................................................................................................70
D) Internal Link: Freedom of Assembly Implicated...........................................................................................................71
E) AT: Historical Precedent – Arbitrators Protect Rights...................................................................................................73
F) Brink: Investment Arbitration Non-Transparent...........................................................................................................74
G) Impact: Human Rights Obligations Not Met.................................................................................................................75
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Openers
Jason Yackee 10 – If developing countries want to attract FDI, they need something other than BITs
Jason W. Yackee [Assistant Professor of Law, University of Wisconsin Law School; J.D. (Duke University School of
Law); M.A., Ph.D., Political Science (University of North Carolina at Chapel Hill)] “Do Bilateral Investment Treaties Promote Foreign Direct
Investment? Some Hints from Alternative Evidence” [VIRGINIA JOURNAL OF INTERNATIONAL LAW, 2010, Forthcoming] <accessed
September 4, 2010> http://ssrn.com/abstract=1594887 (EG)
“This conclusion admittedly has an unfortunate aspect to it. BITs are unlikely to be a quick‐and‐easy cure‐all for
whatever ails the developing country that is failing to receive all the foreign investment that it wants. BITs are not
magic wands, the wave of which produces, with a poof and a cloud of smoke, a foreigner with pockets stuffed
with cash. If developing countries wish to attract foreign investment, they probably need to do something other
than sign and ratify BITs.”
Page 4 of 75
Generic
A) Definitions: Clarification
Prabhash Ranjan 09 – Definition: Bilateral Investment Treaty (FDI)
Prabhash Ranjan [PhD in Philosophy, King's College London, University of London; M.Phil (Master of Philosophy), WB National University
of Juridical Sciences; LL.M (Master of Laws) in International Commercial Law, SOAS, London; LL.B (Bachelor of Laws) Campus Law Centre,
Faculty of Law, University of Delhi; BA in Economics, Ramjas College, University of Delhi; Former Visiting Scholar, Sydney Law School,
University of Sydney; Expert on international investment law, Ministry of Finance, Government of India; Assistant Professor of Law, WB
National University of Juridical Sciences; Former Research Assistant, University College London; Former Legal Researcher, CUTS Centre
for International Trade, Economics and Environment, Jaipur, India] “Tread Cautiously on Bilateral Investment Treaties” November 25,
2009 THE HINDU BUSINESS LINE <accessed August 30, 2010> http://ssrn.com/abstract=1598767 (EG)
“BITs, often perceived as admission tickets to foreign investments, are international agreements signed between
two countries under which each country binds itself, internationally, to offer legal protection and
nondiscriminatory treatment to foreign investments of the other country.”
Sarah Anderson 09 – Definition: Direct/Indirect Capital Controls [With Examples]

Sarah Anderson [MA in International Affairs, The American University; BA in Journalism, Northwestern University; Director of the Global
Economy Project, Institute for Policy Studies; Served 1998 and 1999 on the staff of the bipartisan International Financial Institutions
Advisory Commission; Member of the Investment Subcommittee of the U.S. Department of State’s Advisory Committee on International
Economic Policy; Co-author of the books Field Guide to the Global Economy and Alternatives to Economic Globalization] “Policy
Handcuffs in the Financial Crisis: How U.S. Trade and Investment Policies Limit Government Power to Control Capital Flows” (February
2009) INSTITUTE FOR POLICY STUDIES <accessed August 31, 2010> www.IPS-DC.ORG (EG)
“To meet various objectives, capital controls have taken many different forms that can be loosely grouped into
direct or indirect controls.
1. Direct: These measures seek to directly affect the volume of cross-border financial transactions through
outright prohibitions, quantitative limits, or government approval procedures.
Examples:
Malaysia: At the height of the Asian financial crisis, Malaysia placed a one-year ban on the
repatriation of capital (for details, see p. 7).
Argentina: When the country’s financial and currency crises of 2001 became unsustainable, the
government prohibited domestic and foreign investors from transferring funds abroad, required
central bank approval of wire transfers, and banned foreign currency futures transactions.
2. Indirect: These measures seek to make cross border flows more costly. One of the most common is a
reserve requirement with a central bank, set at a certain percentage of the investment and for a certain
length of time.
Examples:
Chile: From 1991-1998, the government required foreign investors to place a deposit in a non-
interest paying account with the central bank for one year (for details, see p. 7).
Colombia: In 2007, the government acted to combat inflation by introducing a special deposit
requirement on short-term foreign portfolio capital and requiring foreign direct investment to stay
in the country for a minimum of two years.5 These controls were relaxed in September 2008.”
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B) Methodologies
Rudiger Ahred 00 – Survey Methodology
Rudiger Ahrend [*CRED*] “Foreign Direct Investment into Russia – Pain without Gain? A Survey of Foreign Direct Investors” May 2000
RECEP Discussion Paper [*Pub*] <accessed September 3, 2010> [*URL*] (EG)
“The survey, that we developed (and upon which this article is based) was conducted in the spring of 2000 by the European
Business Club in Moscow among its members. For confidentiality reasons we do not know the names of the surveyed enterprises.
We do have some data that allow us to classify them by sector and size - both of the investing parent company, as well as of their
Russian subsidiary. We were told that the 46 enterprises that responded are mainly European, or if they were non-European
multinationals they have at least a large presence in Western Europe. As all surveyed enterprises have at least some presence
in Moscow, there may be some bias towards the Russian capital in our sample. Still, a very large part of FDI has in fact gone to
Moscow, and many of the surveyed investors also have investment projects in Russian regions. Given the limits of our sample, especially
the focus on European investors, it is certainly not representative for all foreign direct investors in Russia. Nonetheless we would expect
foreign direct investors from other continents to face similar problems as those enterprises that we surveyed. Our limited sample size
does not allow for more elaborate econometric techniques, but we are convinced that the survey nevertheless offers insights into
foreign direct investment in Russia. For the surveyed enterprises the number of employees in Russia ranges from 2 to
2500, with an average number slightly below 200. The size of parent companies range from 15 to 400,000
employees, with a mean of 44,000. Roughly one third of the enterprises surveyed are actively producing
industrial goods in Russia, approximately one third are distribution & sales companies, and roughly 10% are in
banking, consulting and transport respectively.”
Page 6 of 75
C) Tables
Yackee 2010,
Yackee 2010,
Page 7 of 75
Yackee 2010, “Figure 4, below, shows distributions of responses for all six scalar questions. It is notable, for instance, that only
approximately 20 percent of GCs reported higher than medium (>3) familiarity with BITs, that no GC reported that non‐lawyer senior
executives were “very familiar” with BITs, and that only approximately five percent of GCs viewed BITs as “very important” to the typical
FDI decision.”
Page 8 of 75
D) Source Indictments
Jason Yackee 10 – Source Indicts: UNCTAD 98, Hallward-Dremeier 03, Salacuse & Sullivan 05 &, Neumayer &
Spess 05: Methodological challenges result in inconsistent results, once accounted for, the BIT-FDI link
disappears
“Surprisingly, however, analysts have had great difficulty reliably demonstrating a statistically significant,
substantively meaningful correlation between BITs and FDI using more sophisticated multivariate frameworks. In
the remainder of this section, I present a brief summary of the principle existing studies.30 UNCTAD provided the first important econometric
study of the relationship between BITs and FDI.31 In a 1998 publication, UNCTAD report results of a cross sectional time‐series model of the determinants of
bilateral FDI inflows. The study covered 72 host states over 23 years. The authors found that the relationship between BITs and FDI was
statistically weak, both in the sense of statistical significance and in the sense of magnitude of effect. The authors concluded that BITs could be expected to only
“marginally increase” FDI.32 A 2003 study by Hallward‐Driemeier, a World Bank researcher, reported somewhat more pessimistic
results.33 Hallward‐Driemeier conducted a TSCS analysis of 20 years of bilateral FDI flows from OECD countries to
developing countries. In most of her models BITs are either insignificantly correlated with FDI, or are significantly and,
counter‐intuitively, negatively associated, implying that BITs might actually harm a country’s FDI prospects. 34 Other of her
models show a statistically significant, positive correlation, but only for countries that already have strong domestic property‐rights regimes—countries that, Hallward‐
Driemeier suggests, are “the least in need of a BIT to signal the quality of their property rights”.35 Hallward‐Driemeier concludes that there is “little evidence that BITs
have stimulated additional investment.”36 In
a 2005 law review article, Salacuse and Sullivan analyze the effects of BITs on
aggregate (rather than bilateral) FDI flows, focusing in particular on the effects of signing a BIT with the United States.37 They report a statistically
significant and massive positive effect: entering a BIT with the United States is associated with an “increased global FDI to a given country in a given
year by 77%‐85% (at a 1%‐5% significance level).”38 In other words, entering a United States BIT might nearly double a country’s FDI inflows. Curiously, however, Salacuse
and Sullivan report that entering BITs with other OECD countries has no significant effect on FDI. The authors suggest that the source of the differential effect is the
comparative liberality of United States BITs.39 Neumayer
and Spess’s 2005 study is perhaps the most cited and influential of the various econometric
studies of BITs and FDI.40 The authors report(s) evidence that BITs have a highly significant and substantively important
positive impact on FDI inflows, such that, for example, a country might nearly double its FDI by signing BITs with a large number of capital‐exporting
countries. However, the authors find that this relationship is conditional on the strength of domestic political institutions in the host state. Host states with domestic
institutions that are ineffective at protecting the property rights of foreign investors are likely to see a significant impact on FDI upon signing a BIT. That positive effect
declines as domestic institutions improve. Neumayer and Spess conclude that BITs appear to be useful “substitutes” for domestic political reform. Rather than investing in
improving domestic institutions, a state that wishes to attract additional investment need only sign a BIT. Neumayer and Spess’s positive results are roughly consistent
with results of a 2004 study by Egger and Pfaffermayr of the effects of BITs on FDI outflows. The authors of the latter study find that ratifying a BIT is associated with a 30%
increase in outflows from the capital exporting country to the ratifying country. They conclude, “BITs exert a positive and significant effect on real stocks of outward
FDI”.41 One
potential problem with the studies discussed so far is that they typically fail to distinguish between
differences in what might be called the “strength” of investment treaties. 42 As I have suggested above, if investors are likely to see
great utility in BITs, it is because the treaties give investors the right to sue states for treaty breaches. However, most BITs signed prior to 1985 do not contain
investorstate arbitration provisions. In a 2009 article, I argued that if BITs impact FDI, we should be most likely to see that effect as to “strong” BITs—e.g. those BITs that
provide for arbitration. In other words, perhaps the inconsistent results of existing studies is due to the fact that those studies lump together “strong” and “weak” BITs.43
I found, however, little evidence that even strong BITs were correlated with FDI inflows. I suggested that these results cast doubt on the validity of the hypothesis that
in the most econometrically sophisticated study to date, Emma Aisbett
BITs should induce large inflows foreign investment. Finally,
identifies a number of serious methodological challenges that existing studies largely ignore, including problems
of endogeneity, autocorrelation, and omitted variables.44 She finds that once these problems are addressed using
appropriate statistical methods, significant correlations between BIT ratification and FDI inflows disappear.”
Page 9 of 75
Law & Society Rev. 08 – Source Indict: Bubb & Rose-Ackerman 07, Guzman 98 [on the enforceability of
investment contracts in international law]
Jason Webb Yackee [Assistant Professor of Law, University of Wisconsin Law School; J.D. (Duke University School of
Law); M.A., Ph.D., Political Science (University of North Carolina at Chapel Hill)] “Bilateral Investment Treaties, Credible Commitment,
and the Rule of (International) Law: Do BITs Promote Foreign Direct Investment?” (Dec 2008) LAW & SOCIETY REVIEW, Vol. 42, Iss. 4; pp.
805-832 (EG) (PB)
“Bubb and Rose-Ackerman (2007) and Guzman (1998) claim that in the absence of BITs, investment contracts are
not legally binding upon host states as a matter of international law. This is simply mistaken. Long-standing
international arbitral practice demonstrates that international tribunals are very willing to enforce investment
contracts against host states (KoIo & Walde 2000).6”
Page 10 of 75
Topicality – Reform
A) Standards
A- Brightline: Definitions should provide a clear distinction between what does and does not meet its standards
optimizing clarity and enhancing education.
B- Education: Policy debate, particularly in NCFCA is an education activity. Thus, whatever definitions provide the
parameters that best enhance the educational value of the debate should be accepted as the definitive boundary
for the round.
C- Fairness: Definitions should define a reasonable and fair interpretation of the resolution. A resolution too
narrow offers the affirmative no room to research for a good case, whereas one too broad would make it
impossible for my partner and I to prepare for debates.
B) Definitions
A- Reform:
- “to put or change into an improved form or condition” – Merriam-Webster Online Dictionary (2010)
<http://www.merriam-webster.com/dictionary/reform>
- “(1) to change for the better [or] (2) Social or political change that seeks to remove corruption or
malpractice” – Webster’s II New Riverside Dictionary (1984)
B- Policy:
- “an overall plan, principle, or guideline; esp : one formulated outside of the judiciary” – Merriam-
Webster's Dictionary of Law (1996)
C) Interpretation
A- Change Must Be Made: If the affirmative supports a policy that is already implemented, then they support the
status quo and they only affirm the legitimacy of current system.
- This interpretation provides a clear brightline. Cases that affirm existing policies fall outside the
resolution, and cases that change policies are fine.
- This interpretation is educational because it allows to compare and contrast the difference between the
current system and the affirmative plan. If the case affirms the status quo, there is no room for
comparison or debate.
- This interpretation is fair because it allows the affirmative plenty of avenues for research and support, but
sets a boundary that allows for negatives to
D) Violation
A- Status Quo: US and Russia have already negotiated and signed a BIT and are still discussing ratification
Anderson & Razavi 10 – A US-Russia BIT is a possible reality; negotiations are underway and remain positive
Alan M. Anderson [J.D., M.B.A., Cornell University; M.A., Norwich University; B.A., Coe College. Shareholder, Briggs and Morgan, P.A.,
Minneapolis, MN.] & Bobak Razavi [J.D., University of Wisconsin Law School; B.A., Amherst College. Associate, Briggs and Morgan, P.A.,
Minneapolis, MN.] “THE GLOBALIZATION OF INTELLECTUAL PROPERTY RIGHTS: TRIPS, BITS, AND THE SEARCH FOR UNIFORM
PROTECTION” GEORGIA JOURNAL OF INTERNATIONAL AND COMPARATIVE LAW, [Vol. 38, No. 2 (2010)] (EG)
Page 11 of 75
“Arguably, the extent of U.S. loyalty to TRIPS will be measured in large part by whether the U.S. continues to push for Russian membership in the WTO. Since
late
2007, the U.S. and Russia have discussed the possibility of a U.S.- Russia BIT. 127 Negotiators from the two countries
held formal discussions in February 2008, discussing their respective model BITs and conducting a preliminary
evaluation of the potential for finding common ground that could eventually make a U.S.-Russia BIT a reality. 128
Presently, negotiations remain nascent but positive. 129 An agreement between the U.S. and Russia would
complete a protracted post-Cold War courtship between the two that extends back to 1992, when they
negotiated and signed a BIT that the Russian Duma ultimately never ratified. 130”
B- Affirmative Plan: The aff plan has the US Federal Government negotiate, sign, and ratify a BIT with Russia.
C- Violation: No Change – The United States has already negotiated and signed a BIT, so 2/3 of the plan has
already been completed; but furthermore, they are also pushing forward on ratification. Every provisions of the
affirmative plan is in the status quo already.
The aff violated the status quo because they don’t actually change anything at all. They are advocates of the
status quo.
E) Impacts
A- Education: Non-topical plans destroys education because it makes it virtually impossible to predict cases and
prepare for them. When we do predict it and research it, it harms education by forcing us to divert focus away
from legitimate plans that fit within the parameters of the resolution.
B- Fairness: Non-Topical plans destroys fairness; they already have infinite prep time, but non-topical plans are
almost impossible to predict so it doesn’t make for a fair competition.
Analogy: Counsels preparing for the merits of the case in order to have a fair and just trial.
Page 12 of 75
Solvency 1: Alt Cause – Financial Policy
A) Financial Policy
William Cooper 07 – Russian economic policies and regulations a major inhibitor of trade and investment
William H. Cooper [Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division] “Permanent Normal Trade
Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties” July 10, 2007 CONGRESSIONAL RESEARCH SERVICE <accessed August
25, 2010> http://www.fas.org/sgp/crs/row/RS21123.pdf (EG)
“Russian economic policies and regulations have been a source of concerns. The United States and the U.S.
business community have asserted that structural problems and inefficient government regulations and policies
have been a major cause of the low levels of trade and investment with the United States. Russia maintains high
tariffs on some goods that U.S. manufacturers try to export. For example, tariffs on cars plus the excise tax that is prorated
for engine displacement adds close to 70% on the price imported U.S. passenger cars and sports utility vehicles. Russia also maintains a
20% tariff on aircraft. U.S. exporters have also cited problems with Russian customs regulations that are complicated and time-
consuming.”
William Cooper 07 – Russian end of the investment climate proves inhospitable for US investors
William H. Cooper [Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division] “Permanent Normal Trade
Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties” July 10, 2007 CONGRESSIONAL RESEARCH SERVICE <accessed August
25, 2010> http://www.fas.org/sgp/crs/row/RS21123.pdf (EG)
“While they consider the investment climate to be improving, U.S. investors and potential investors complain
that the climate for investment in Russia remains inhospitable. For example, U.S. financial services providers have
criticized Russian government restrictions on foreign investment in the banking and insurance sectors and
prohibitions on the establishment of branches of foreign-owned insurance companies and banks. 7 Investors have
been also been wary of Putin Administration actions in reestablishing Russian government control over oil and
natural gas operations and over other natural resources.”
Page 13 of 75
B) Tax System
Rudiger Ahred 00 – A reasonable, transparent, and predictable tax system is needed before Russia can create a
good investment climate
“Even though improvements in a wide range of areas will be required before Russia can create a good investment
climate, foreign direct investment - especially when one produces locally in Russia – appears to be a much more attractive prospect than the general view in the
Western press would suggest. Still, there should be swift progress on at least the most pressing issues. Improving the tax law
seems an absolute priority. As indicated by the low significance of tax incentives for investment and location
decisions, foreign companies are not asking for temporary better treatment or tax rates far below international
standards; however, they are looking for a reasonable, transparent, and predictable tax system.”
Rudiger Ahred 00 – The most important issue for investors is the ever changing tax law; even more important
than Russian trade policy itself
“We provided the surveyed companies with a large list of problems that foreign investors might potentially face,
and asked them to rate them for their degree of importance. According to the responses the most important
problems by far are simply the inadequate and ever changing tax law. Next in the order come problems with property- and creditor
rights, customs, the risk of political change, macroeconomic instability, a weak banking sector, the Russian accounting system, and corruption. It is striking that
the tax law in itself is perceived as a much bigger problem than the tax authorities that are supposed to enforce
it. On the contrary custom authorities, and to a minor degree the frequent changes in trade policy, are rated as bigger
problems than Russian trade policy itself.”
Page 14 of 75
C) Impact: Zero Positive Effect
Prabhash Ranjan 09 – BITs have zeronegative effect on FDI; investment depends mainly on economics
“Studies that examine the effect of BITs on foreign investments conclude that either there is no effect of BITs on
investment flows, or that there is a weak or even negative effect in certain cases. In fact, foreign investment
flows, much more than BITs, depend on macroeconomic factors such as the host country’s overall economic
stability, advantages as a location, level of infrastructure and other related factors. Another example is of Brazil that has
no BITs, but is still one of the leading recipients of foreign direct investment in Latin America — once again
showing that foreign investment inflows depend mainly on economics and not so much on BITs.”
Page 15 of 75
Solvency 2: Russia Won’t Ratify
A) Russia Doesn’t See the Point
Rubins & Nazarov 08 – Russia sees no benefit in limiting its own freedom in order to grant privileges to foreign
investors
Noah Rubins [M.A. in Dispute Resolution & Public International Law, Fletcher School of Law and Diplomacy; J.D., Harvard Law School;
B.A. in International Relations, Brown University; Member of the international arbitration and public international law groups
specializing is investment treaty arbitration] & Azizjon Nazarov [B.A. in Finance, Tashkent State University of Economics; M.A. in
International Law and Economics, Bern University, Switzerland; PhD Candidate, Tashkent State Institute of Law; Senior Lecturer in Law
and teaches Labour Law and International Commercial Arbitration, Westminster International University] “Investment Treaties and the
Russian Federation: Baiting the Bear?” BUSINESS LAW INTERNATIONAL Volume 9, Number 2, (May 2008) <accessed August 28, 2010>
(EG)
“Rising natural resource prices and the stabilisation of the Russian economy after 2000 would appear to be far
more likely motivation for the changes in treaty policy. Russia’s Deputy Minister of Economic Development and
Trade admitted as much in 2001, stating that the freeze on new BITs was undertaken to avoid granting any ‘new
privileges’ to foreign investors.24 With no particular need to attract foreign capital, and still relatively limited
outward investment on the part of Russian companies, the Government could see no particular benefit to
limiting its freedom to act in relation to foreign investors. Whatever the motivation, the result is that the Russian
Federation has placed its investment treaty negotiation and ratification programme in stasis.”
Rubins & Nazarov 08 – Putin’s administration marked a change in Russian policy that marked a sharp decrease
in signed investment treaties
(EG)
“The beginning of Putin’s administration marked a cardinal change in Russian policy with respect to investment
protection treaties. Most importantly, the rate at which new BITs were signed dropped sharply. Only three
treaties with relatively insignificant trading partners – Jordan, Thailand and Armenia – were concluded after 1999. Just
as disturbing, hardly any investment treaties were ratified by the Duma, an essential prerequisite for any such
instrument entering into force. The failure to ratify was particularly pronounced with respect to treaties
representing potentially significant inward capital flows: the US-Russian Federation BIT, for example, was signed
in 1994 and has languished in Duma committees ever since.”
Page 16 of 75
B) Impact: Russia Won’t Ratify
Rubins & Nazarov 08 – Controversial legal issues will prevent the Duma from ratifying a dozen or so BITs;
Russia is mostly uncompromising
(EG)
“Time will tell whether these and other controversial legal issues will be resolved in favour of claimant investors
or the Russian Government. It is already certain that the arbitration claims submitted by Menatep and the other
Yukos shareholders will prevent the ratification by the Russian Duma of the ECT (as well as a dozen or so BITs) in the
foreseeable future. It is very unlikely that even total victory in arbitration against the Russian Federation will not lead directly to monetary compensation for
aggrieved investors. The enforcement of arbitral awards in Russia has long presented serious problems for foreign contracting parties. The Russian courts’ consistent
application of international conventions on the enforcement of foreign commercial arbitration awards does appear to be improving in recent years.52 However, there is
little sign that the Russian Government has changed its recalcitrance with respect to arbitration awards rendered against it. The Russian Government has often taken
advantage of the inability of foreign creditors to enforce against state assets in Russia, combined with sovereign immunity rules in other countries, to delay payment of
awards for years. Only dogged persistence and skilled investigators and lawyers have managed to locate and attach Russian Government assets abroad – as in the
Sedelmayer case, described above. In other instances, payment may be even longer in coming.53 Nevertheless, the existing Russian investment treaty regime may
provide a realistic avenue to limit or rectify unfair and unexpected government interference in commercial affairs. Russia has signed and ratified more than 30 BITs, of
which at least half were drafted according to a more or less standard OECD template. Already, many foreign investors in Russia are structuring their investments not only
to minimise tax burdens and to access advantageous regulatory regimes, but also to benefit from investment treaty protection. Carefully examining the provisions of
For
investment treaties in force and considering incorporation of project vehicles in appropriate jurisdictions have become an essential part of business planning.
now, the Russian Federation has been relatively immune from the effects of the investment protection treaties it
has signed. But increasing knowledge about the function of these instruments among the foreign investment
community has already led to an increasing number of arbitration claims against the government . It is still unclear
whether most of these claims will result in enforceable judgments, or influence Russia’s policy towards foreign capital. At the very least, these new actions may provide a
new way to procure a seat at the negotiating table with a government otherwise disinclined to compromise.”
Page 17 of 75
Solvency 3: Alternative Evidence  FDI Ø ↑
A) General: Alternative Evidence Proves
Jason Yackee 10 – Three alternative sources of evidence prove that BITs have not been a major source or even
a partial source of increased FDI since the ‘90s
“I pursue three alternative avenues of inquiry. First, I examine whether investment treaties appear to influence
rankings of “political risk” provided by for‐profit business consultants. If investment treaties are important
elements in the foreign investment decision‐making process because they protect against the risk of adverse political actions (like
expropriation), we might expect that companies whose line of business is to gauge such risks will incorporate the
presence or absence of treaties into their evaluations. In other words, I use political risk rankings as a dependent variable, in substitution for
the more commonly used dependent variable of FDI inflows. Second, I present results from a small e‐mail survey of providers of
political risk investment insurance, in which I ask respondents to describe the extent to which investment treaties enter into their underwriting decisions.
I suggest that if BITs matter to investors because they successfully reduce political risk, we might expect insurers to
take the treaties into account when deciding whether to issue investment insurance on particular terms. Third, I present
results from an original, mail‐based survey of general counsel (GCs) in large U.S.‐based corporations, in which I ask
respondents whether investment treaties influence their companies’ decisions to invest. I suggest that if investment treaties meaningfully impact
FDI, that influence is likely to flow into the corporation’s decision‐making process through the GC’s office, which acts
as a repository of legal knowledge within the corporation and which is typically tasked with advising on the legal implications of corporate decisions. If the GC’s office has
little knowledge or appreciation of BITs as risk‐reducing devices, it is unlikely that corporate decision‐makers factor the treaties into their investment decisions. The
results of these three lines of inquiry provide only weak evidence that BITs meaningfully influence FDI decisions. BITs are not
strongly correlated with political risk rankings, and providers of political risk insurance only inconsistently take
BITs into account when making underwriting decisions. Indeed, the majority of providers surveyed do not view
BITs as relevant to their underwriting decisions. Finally, general counsel report relatively low corporate familiarity
with or appreciation of BITs as risk‐reducing devices. These results by no means definitively prove that BITs never matter to
investors when they decide whether and where to invest. Nor do they prove that BITs won’t matter more to investors at some time in the future, as knowledge of BITs
and confidence in the strength of their protections grows. What the study does suggest, however, is that grandiose claims about the historically demonstrated ability of
BITs to promote investment should be consumed with caution. BITs may influence certain investment decisions. From the results presented below, we can somewhat
confidently conclude that they don’t seem to particularly influence many others. BITs
have probably not been the primary cause, and
perhaps not even a partial cause, of the massive increase in foreign investment to the developing world that
began in the 1990s.”
Page 18 of 75
B) Alt Ev 1: Political Risk Ratings
Jason Yackee 10 – If political risk raters take BITs into account, investors will also; If BITs reduce political risk,
raters will take them into account; analysis proves that BITs fail to significantly affect political risk
“The PRS Group48 and BERI, SA49 are two prominent private, for‐profit providers of political risk ratings. Both
organizations provide business clients with qualitative analysis of business‐related political and other
developments in various countries. They also provide quantitative evaluations of various kinds of “risk”.50 For example, the PRS Group produces three “International Country Risk Guide”
(ICRG) indexes gauging levels of “political risk”, “financial risk, and “economic risk”. The political risk index is a 100‐point index based on subjective in‐house evaluations of a number of variables, such as the level of “ethnic
tensions”, the degree of “government stability”, and the extent of “corruption”.51 For present purposes, the most important component is a 12‐point sub‐index of a country’s “investment profile”, which itself consists of expert
evaluations of three further sub‐categories of risk: the risk of breach of contract and expropriation, the risk of interference with the repatriation of investor profits, and the risk of delay in payments. I use the 12 ‐point investment
profile index in the analyses below.52 BERI produces a similar index of “operations risk” that is based on subjective evaluations by what BERI describes as a permanent panel of approximately 100 experts.53 BERI’s operations
risk index incorporates a sub‐index that evaluates a country’s “attitude” toward foreign investors, and I use that sub‐index in the analysis below.54 I use the ICRG and BERI sub‐indexes because the organizations’ aggregate
political risk indexes include a number of risk‐related factors not directly related to the legal protections that BITs provide. In other words, I am examining the impact of BITs on political risk narrowly rather than broadly
construed. This is because there is no theoretical reason to expect BITs to be causally associated with variables like political instability, risk of war or insurgency, or other factors that might form part of a more general definition
of “political risk”. Unlike political risk insures (discussed in more detail in Part 5, below), neither the PRS Group nor BERI insure against political risks, and neither company has a direct financial stake in the quality or accuracy of
both organizations have an indirect financial interest in providing evaluations useful to corporate clients. If either
its evaluations. On the other hand,
organization consistently errs in its evaluations of risk, presumably corporate clients will stop using their services. That risk of loss of
business arguably provides the organizations with some degree of incentive to produce accurate evaluations of risk. These quantitative ratings of the
If BITs work by reducing political risk (e.g. risk of expropriation),
investment‐related aspects of political risk provide us with an alternative means of testing whether BITs promote FDI.
then we might expect to see that organizations like the PRS Group or BERI systematically assign more favorable
risk ratings to those states that enter into BITs. If foreign investors rely on these ratings when deciding whether and where to invest, then BITs may influence the investment
decision‐making process indirectly, or at least independently of any specific knowledge or appreciation of BITs by foreign investors themselves. Alternatively, we might view the process by which organizations like the PRS Group
and BERI make political risk evaluations as likely to mirror the processes that businesses use when deciding whether to invest. If PRS Group and BERI experts take BITs into
account, then investors may do so as well. To examine whether BITs impact political risk ratings, I regressed the ICRG Investment Profile and the BERI Investment Attitude indexes
against a simple model of the determinants of political risk. I also include results for a third measure of political risk, a rating of “expropriation” risk developed by the University of Maryland’s IRIS Center and used by Knack and
Keefer.55 The IRIS measure is based on ICRG data, and arguably provides a more specific measure of the kinds of risk that BITs might reduce than does the more aggregate ICRG “Investment Profile” measure. For all three
measures, a higher rating means less risk (or, a higher rating means a more favorable investment climate). The ICRG Investment Profile variable has an observed range of 0 to 12, with a mean of 6.7; the BERI Investment Attitude
variable has an observed range of 0 to 0.2 to 4.8, with a mean of 2.4; the IRIS variable has an observed range of 0.5 to 10, with a mean of 7.1. My dataset is structured as a pooled cross ‐sectional time series (CSTS), meaning that
data is organized by country‐year. The sample of countries included in the models depends on the dependent variable used, but in all models is limited to developing (capital importing) countries. All models share a common
suite of control variables. While the models are relatively parsimoniously specified, it is important to note that adding more control variables would not necessarily reduce any potential problem of “omitted variable bias”.56 Per
capita gross domestic product (GDP) is included to control for the possibility that less developed countries may face increased incentives to expropriate foreign investment. The annual inflation rate controls for incentives to
expropriate during times of economic instability. Both variables are taken from the World Bank’s World Development Indicators. To control for a state’s history of investor ‐unfriendly behavior, I include a dummy variable
indicating whether a state was identified as a “mass expropriator” in Kobrin’s classic empirical study of the determinants of expropriation in the 1960s and 1970s.57 I also include a state’s “birth year” to control for the possibility
that newer states will face greater incentives to expropriate.58 Finally, I include the Polity IV Project’s measure of democracy in the host state.59 Political science scholarship suggests that the risk of expropriation and other
forms of opportunistic anti‐investor behavior are lower in democracies than in autocracies.60 The explanatory variable of principle interest in all of the models is a count of the number of strong bilateral investment treaties (or
strong investment chapters in free trade agreements) that a state has in force with major capital‐exporting countries. I consider a BIT to be “strong” if it contains the state’s pre‐consent to investor‐initiated arbitration for a wide
range of potential investor‐state disputes.61 This variable ranges from 0 to 15. Figure 2, below, provides a preliminary graphical analysis that sets the stage for the more complex statistical analysis that follows. The figure shows
scatterplots for the strong BITs variable (lagged one year) and the three measures of political risk. The data points are all country‐years for which political risk data is available. The scatterplots show a generally modest positive
correlation between the number of strong BITs in force and a country’s level of political risk, as indicated by the upward sloping trend lines. (Recall that a higher value on all three indicators indicates less risk). However, we also
see substantial variance around the trend lines. That variance suggests that BITs are, at best, a highly partial predictor of political risk ratings. Results for the regressions are presented in Table 1, below. The Table 1 models were
estimated using two alternative strategies: first, generalized least squares (GLS) with fixed effects (FE), a common approach for estimating CSTS models,62 and second, using an alternative panel corrected standard error (PCSE)
approach recommended by Beck and Katz for CSTS data.63 All models include a lagged dependent variable (LDV) (the country’s political risk rating in the prior year) in order to control for autocorrelation, as recommended by
Keele and Kelly.64 We can think of the LDV as controlling for the probability that a current year’s risk rating will be influenced by last year’s risk rating, the latter of which the expert rater will undoubtedly consult when
evaluating the level of risk in the upcoming year. The regression analysis provides little evidence that BITs meaningfully influence political risk
ratings. The BITs variable is statistically significant in only two of the six models, those using the ICRG Investment Profile rating as the dependent variable. BITs are not a significant
predictor of either the BERI measure of Investment Attitude or the IRIS measure of risk of expropriation , with the latter
result especially notable, given that BITs are often said to “work” precisely by reducing the risk of expropriation. In the ICRG models, where the BIT variable is significant and positively signed, the
magnitude of the effect is nonetheless substantively weak. For example, the coefficient on the BIT variable in Model One of 0.0740 implies that entering ten
additional BITs with major capital‐exporting countries might raise a country’s ICRG Investment Profile rating by less than a
single point on the ICRG’s 12‐point index. Model 2’s coefficient of 0.0375 implies an even less impressive effect. Moreover, if we include a year variable in the ICRG models in order to control
for time trends (results not shown), the BIT variable falls from significance, while the time counter is highly significant. What does influence risk evaluations? The LDV proves to be a highly significant and substantively important
predictor of risk ratings. A country’s perceived level of risk in 1989, for example, will strongly influence its perceived level of risk in 1990. Risk ratings are, in other words, relatively “sticky”, and that stickiness suggests that host
states desiring greater investment should not expect relatively easy policy changes (like the decision to enter into BITs) to influence investor perceptions of risk, at least over the short term. We also see relatively consistent
evidence that political democracy positively impacts risk ratings, a finding in line with past research on democracy and foreign investment: the Polity variable is significant and positive in four of the six models (the ICRG and IRIS
models), suggesting that greater levels of democracy are associated with less perceived political risk. In brief, the Table 1 models suggest either that BITs have no statistically significant impact on political risk ratings, or, if they
BITs do not appear to meaningfully influence subjective expert evaluations of political risk. These
have an impact, it is quite small.
results appear consistent with the simple bivariate graphical analysis presented in Figure 1, which showed only a modest
positive correlation between BITs and risk ratings.”
Page 19 of 75
C) Alt Ev 2: Political Risk Insurers
Jason Yackee 10 – If political risk insurers take BITs into account when issuing PRI, then investors likely do so
when making investment decisions; Most insurers do not take BITs into account, and when they do, the impact
is slight
“Unlike political risk rating organizations like the PRS Group, which merely provide companies with investment‐related analysis, political risk insurers
provide foreign investors with insurance against certain adverse events, such as uncompensated expropriation by the host state,
damage resulting from political violence, and currency inconvertibility. Political risk insurance (PRI) has traditionally been provided by public agencies of capital exporting
Political
states (such as the United States Overseas Private Investment Corporation (OPIC)). However, private insurers also increasingly offer the product as well.65
risk insurers provide us with another alternative means of examining whether BITs succeed in promoting FDI. 66
First, if insurers take BITs into account when deciding whether and on what terms to issue PRI, that suggests that
investors—who, like insurers, have direct financial incentives to gauge political risk before deciding whether to invest—are themselves likely to
consider BITs as part of the investment decision‐making process. 67 Second, if PRI providers take BITs into account
when deciding whether to issue insurance, BITs may indirectly promote FDI (regardless of investor knowledge of appreciation of
BITs) by making PRI more available and more affordable. 68 An investor who will not invest absent PRI may be more likely to find affordable PRI
— and thus to invest—if BITs impact the insurer’s underwriting decisions. Of course, that latter possibility assumes that investors investigate the availability and price of
PRI at a relatively early stage in the investment decision‐making process, before the investor’s organization has become either formally or informally committed to a
particular investment decision. That assumption may be unrealistic, as investors typically apply for PRI late in the investment process, with PRI providers requiring such
things as an underlying investment contract and other detailed information about the planned investment.69 At that late stage, the professional and financial sunk costs
may be so high that corporate decision‐makers unwilling to back out of the decision to invest even if PRI is unable to more costly than initially assumed.70 In any event,
the question of whether PRI promotes investment is beyond the scope of the present article. My main goal in this section is rather to present results from a small e‐mail
Email surveys were sent to 56 companies across the globe.
survey of PRI providers that I conducted during the summer of 2008.
Responses were received from 14 companies, for a response rate of 25 percent, and represented a mix of large
and small public and private providers.71 Respondents were asked two main questions: first, was it the firm’s “standard practice to determine whether
the investment project will be covered by a BIT before agreeing to issue the insurance policy”? Second, “Does the presence or absence of a BIT influence the premiums
that your organization charges investors for expropriation insurance”? Respondents answering “yes” to the second question were then asked to provide an estimate of
Of the 14 respondents, eight said
the magnitude of any effect on premiums. Respondents were also asked to provide explanatory comments if possible.
that it was not standard practice to determine whether an investment would be covered by a BIT prior to issuing
a policy, and nine indicated that BITs have no impact on rates charged for expropriation insurance. Furthermore,
those respondents that indicated that BITs impact expropriation insurance rates suggested that the impact was
often apparently rather slight.”
Jason Yackee 10 – BITs don’t systematically affect PRI availability or premiums; this indicates that investors
likely don’t value BITs much and unlikely indirectly promotes FDI
“The number of respondents is too low to permit any sort of statistical evaluation, but the pattern of responses suggests, at a
minimum, that BITs only imperfectly and inconsistently impact PRI decisions. For many underwriters, including large
private providers motivated primarily by considerations of profit, BITs have no impact on insurance decisions. For others, that impact
may be relatively slight. In short, the practices of PRI providers provide little evidence in support of the hypothesis that
BITs should have substantively meaningful impacts on FDI. If PRI underwriters don’t highly value BITs, then
foreign investors are unlikely to value them much either. And if BITs don’t systematically influence PRI availability
or premiums, then the treaties are unlikely to indirectly promote FDI by making investments more readily
insurable.”
Page 20 of 75
Jason Yackee 10 – Survey respondents opinions and statements
“For example, a large private provider responded that “We rarely get info relating to a BIT until the later stages of
any disclosure info”, that BITs have “no direct influence—country risk factors may be affected a little but usually
other factors driving the price…aggregate pressure, competition, prices from [public providers]”, and that BITs
might impact pricing “less than 5%, if anything.” Another private provider responded that
In short BITs don’t effect pricing at all for me. I don’t regard the process as being robust enough
with enough of a successful track record. Furthermore, if one looks at Latin America at the moment
countries seem to unilaterally pull out of international arbitrations, so ultimately we give the
structure no credit.
This view of the limited utility of BITs and of international arbitration was echoed by another private underwriter:
A BIT is only of any real value to us if it is supported by bonds or letters of credit lodged with a third
party outside the country that may be drawn on relatively easily to compensate expropriation not
otherwise adequately compensated by the country in question. Promises of arbitration and
compensation not supported by realizable assets (and in most cases I suspect they are not) are not
that persuasive in reducing premiums (IMO). But then I am just a cynical underwriter[.]
… the BIT is not a deciding underwriting factor in most cases and other issues relating to the
character of the government in power, local government…, semi‐official corruption, the character
of the foreign company, the social, employment and poverty situation in the country and economic
issues regarding, say, any increase in commodity prices since a company won its license to drill or
extract are far more important.
A fourth private provider indicated that BITs were taken into account but were “not always required”, but that
their impact on premiums was only to “make[] the risk a bit more palatable”. Public providers also suggested that
BITs were largely irrelevant to their decisions. A developed‐country public provider commented that “the
existence of a [BIT] is a comfort but does not itself influence premium pricing”. Another developed‐country public
provider noted that “[BITs are considered a “minor factor” in assessing a government’s attitude toward business
and foreign investment” but “the premium rates quoted or charged are not influenced by the presence or absence
of a BIT alone”. On the other hand, one public provider responded that the presence of a BIT would have a
relatively large impact on premiums, raising premiums from 0.5% of insured value up to 0.94% “depending on the
project and country concerned”.72 A small private provider responded that “it is very important that a [BIT] exist”,
but suggested that the importance was due to the firm’s “small investment book”. Another public provider
affirmed that “the Board of Directors take seriously into account the fact that a BIT exists. … [T]his is considered
as a “positive” eligibility criterion for the Board of Directors’ decision. On the other hand, if there is not a BIT, this
does not mean that the application is rejected automatically. In that case, we evaluate more strictly the political
situation in the Host Country, and of course, we set a lower percentage of cover and a higher annual premium.”
However, the respondent added that it was impossible to indicate any general effect of BITs on premiums,
because “we evaluate each application on a ‘case‐by‐case’ basis.”
Page 21 of 75
D) Alt Ev 3: Investor Knowledge & Appreciation

Jason Yackee 10 – Anecdotal and historical survey evidence suggests investors don’t know about or care about
BITs (3 examples)
“The hypothesis that BITs are likely to lead to large inflows of FDI typically seems to rely on a three ‐stage
assumption about investor knowledge and behavior. First, potential investors are aware of the treaties. 73 Second,
investors appreciate the treaties either as actual, direct reducers of risk (and thus as enhancers of expected profitability) or as
reliable signals of a low‐risk environment. Third, investors base their investment decisions on the presence or
absence of a treaty because of their risk‐reducing or low‐risk‐signaling attributes. But do investors really know or
care much about BITs? Anecdotal and historical survey evidence suggests they might not. A small survey of business
executives conducted in 1976 found that only 16 percent of respondents were “familiar” with the ICSID system generally, and that only 4 percent felt that ICSID provided
“adequate safeguards”.74 A somewhat more recent study confirmed the continued validity of these results.75 Even
in the late 19 90s BITs and BIT‐
based arbitration appear to have remained an “often overlooked tool” in the legal arsenal of multinational
corporations.76 The international law firm Allen & Overy has recently advertised BITs to potential clients as
entailing “rights you never knew you had”.77 And a 1999 survey suggested that “many chambers of commerce
indicated that they had no familiarity with” the Energy Charter Treaty, a prominent multilateral “BIT” covering
energy sector investments.78”
Jason Yackee 10 – GCs Survey: Respondents indicate unfamiliarity with Bits, and did not view them as effective
protections against expropriation, adverse regulatory change, or influential in the “typical” FDI decision
“We see that the companies surveyed reported relevantly frequent consideration of foreign investment (median response of
4, where 5 indicated “frequently” and 1 indicated “never or rarely”). We also see that the median GC is relatively unfamiliar with BITs (2,
where 1 indicated “not at all familiar” and 5 indicated “very familiar”). Non‐lawyer senior executives were somewhat less familiar with
BITs, as the lower mean score (2.04) indicates. Respondents did not view BITs as particularly effective at protections against
expropriation (a median response of 3, where 5 indicated “very effective” and 1 indicated “not at all effective”). They were less impressed with
BITs as an effective shield against adverse regulatory change (median score of 2). This latter result is important, because
expropriation, in the classic sense, has become an exceedingly rare phenomenon, and most investments are probably not at any significant, real risk of classic
expropriation.85 If BITs have an important role to play in reducing risk, it is probably at reducing the risk of so‐called “regulatory
expropriation”—that is, at protecting companies against adverse regulatory changes that amount to less than a full
“taking” of the investment. In fact, GC skepticism about the ability of BITs to protect against regulatory change is consistent with the jurisprudence of
arbitral tribunals, which have so far refused to read an ambitious regulatory takings doctrine into the treaties.86 Finally, BITs don’t appear to be all that
important a consideration in the “typical” FDI decision, and only four respondents report that their company has
declined an investment opportunity specifically because of the absence of BIT protections. 87”
Page 22 of 75
Jason Yackee 10 – GCs (Fortune 200) survey: Indicates little knowledge of BITs and a pessimistic view of their
ability to influence FDI decisions [Includes: Methodology + defense]
“In an attempt to arrive at a more scientifically sound basis for gauging investor awareness of BITs I conducted a
mail survey of general counsel (GC) in large U.S.‐ based corporations. A copy of the survey instrument is included as an appendix to this
article. The survey was mailed to GCs in the top 200 U.S. corporations on the Fortune 500 list, with a first mailing
followed by a second mailing to non responders. The survey was purposefully short (one single‐sided page) to promote responses, and a small
incentive was included in each mailing.79 A second round of surveys was sent to U.S. corporations ranked between 201‐400 on the Fortune 500 list, but the results from
the second administration were not compiled in time for inclusion in this article. Respondents were promised that their identities and the identities of their corporations
would not be revealed. Using surveys to evaluate the extent to which BITs enter into corporate FDI decisions poses certain obvious difficulties, the primary of which is that
a corporation is a complex organization consisting of numerous individuals, each of whom may or may not posses relevant knowledge of the corporate practices with
which the study is concerned. Identifying relevant contacts, and persuading those contacts to participate, can be highly challenging, especially when the goal is a survey
covering a broad selection of corporations. I elected to direct my survey at GCs for both practical and substantive reasons. First, contact information for GCs is readily
identifiable in corporate documents, on corporate websites, and through mailing‐list companies like InfoUSA. Second, GCs were probably more likely to respond to the
survey than other high‐ranking corporate officials, such as CEOs, who may generally be both busier and less inherently interested in a questionnaire probing the extent to
which legal instruments influence corporate decisions. Third, and more substantively, there is good reason to expect that GCs are in a good position to gauge the
importance BITs to corporate decisions. In‐house counsel increasingly enjoy significant power and prestige within large corporations, and they are frequently called upon
to perform legal risk analysis of corporate proposals and decisions.80 GCs are often part of the senior management team (or consult frequently with it), and Kobrin
indicates that political risk analysis is often conducted at the senior management level and/or within in‐house legal departments.81 Furthermore, given the highly
technical and relatively inaccessible nature of BIT jurisprudence, busy non‐legal senior executives are unlikely to be in a position to either monitor or evaluate BIT
developments.82 If BITs come to the attention of FDI decision‐makers, they may be most likely to come to their attention through communications with an in‐house
Seventy‐five surveys were returned, for a response rate of 37.5 percent. This response rate is relatively high
lawyer.
considering the nature of the respondents.83 Responses were distributed across the Fortune 200, as Figure 3, below, illustrates. Respondents were
asked the following seven questions, the first six of which were answered on a scale of 1 to 5, where 1 was labeled “not at all familiar” (or its equivalent, depending on
question wording) and 5 was labeled “very familiar” (or its equivalent). The last question was in “yes/no/don’t know” format.
Q1. To your knowledge, how regularly does your company actively consider investing in foreign (nonUS.) operations, businesses, joint ventures, or
other projects?
Q2. How familiar are lawyers in your office with the basic provisions of Bilateral Investment Treaties (BITs)?
Q3. How familiar are nonlawyer senior executives in your corporation with the basic provisions of BITs?
Q4. In your view, how effective are international treaties like BITs at protecting foreign investments from expropriation by a foreign government?
Q5. In your view, how effective are international treaties like BITs at protecting foreign investments from adverse regulatory change in the foreign
country?
Q6. How important is the presence or absence of a BIT to your company’s typical decision to invest in a foreign country?
Q7. To your knowledge, has your company ever declined to invest (or to consider investing) in a particular foreign project specifically because of the
absence of a BIT?
Overall, the responses indicate a relatively low level of familiarity with BITs, a relatively pessimistic view of their
ability to protect against adverse host state actions, and a relatively low level of influence over FDI decisions.”
Page 23 of 75
E) Impact: FDI Ø ↑
Jason Yackee 10 – Intl gas & oil chair informant: BITs generally do little to promote FDI
“With the caveat that anecdotes aren’t proof, but merely another source of data from which to triangulate, I
offer the observations of an informant interviewed in the course of the survey of GCs discussed above. The
informant is the chair of the oil and gas section of a major international law firm, and has extensive experience in
facilitating and advising on all stages of major international and domestic oil and gas projects. The informant also lectures
regularly at professional conferences on legal risk assessment in the international oil and gas sector, and has authored practitioner‐oriented papers on the topic, including
papers that discuss BITs. After explaining my project, I asked the informant his thoughts on the role that investment treaties play in
oil and gas investment decisions. Given the history of expropriation in that sector, one would think that oil and gas investors would be keenly interested
in BITs.105 The informant emphasized that for him personally, identifying the possibility of “treaty support” for a potential investment opportunity should
be a “common sense” part of due diligence. However, he added that many legal issues, including BITs, typically only come up “after the fact”
(after a dispute has arisen). It was only the relatively infrequent “sophisticated” client who would engage in rigorous legal due diligence prior to the decision
to invest, and if BITs came into the process, it was almost always part of a discussion of how to structure (e.g. trans‐ship) a
given investment that was already going to be made. This kind of structuring consideration was much more common for tax purposes than to
achieve BIT coverage, but he advocated (and had been involved in) considerations for BIT coverage purposes as well. I specifically asked the informant if he was aware of
any investment deals that had not gone forward because of the absence of a BIT, and his answer was quick and unambiguous: he
had “never seen anyone
not do a deal because there wasn't an investment treaty.” Why weren’t BITs more relevant to investor decisions?
In his view, it was the "nature of the business", which was "not driven by lawyers", but by "commercial" people
whose job was to “get the deal done as soon as possible”. Rigorous legal due diligence (even, he said, applying for OPIC or
MIGA insurance) holds up the deal, and for that reason is often avoided. The informant’s comments may or may not reflect wider industry
practice; they may or may not reflect practice in other sectors, such as manufacturing or services. They may reflect a totally and completely atypical set of professional
experiences.106 Indeed, in a sense they must, if it is really true that a country can nearly double its FDI inflows merely by entering investment treaties. I would suggest
that the
informant’s observations fit rather well into the preceding pages of analysis and exposition. They confirm
my sense, backed up by a lack of consistent empirical evidence, that BITs generally play little causal role in
promoting foreign investment.”
Page 24 of 75
F) Response – Formal Law Ø Impact Commercial Affairs

Jason Yackee 10 – Formal law only plays a limited role in commercial affairs: Developing countries need not
sing BITs to attract investment and countries refusing BITs won’t see a meaningful reduction in FDI
the article’s empirical results would seem to confirm that Law and Society
“What are the article’s larger implications? Theoretically,
observations about thelimited and indirect role that formal law plays in the organization of commercial affairs domestically
also applies internationally. While foreign investors are presumably more in need of legal protection against adverse
government action than are purely domestic investors, who may enjoy greater access to and influence over the domestic political system, and who are less able to be
the business decisions of foreign investors don’t seem to be particularly motivated by the
scapegoated as “outsiders”,
availability of special international legal protections—at least not of the variety routinely included in BITs. More practically, the
results suggest that developing countries that wish to attract investment, or to continue to attract investment, need not
sign on to the rigors and disciplines of BITs. Countries that refuse to sign BITs, or who allow their BITs to lapse,
will probably not see a meaningful reduction in investment flows. Nor will they fall ever more behind in the so‐
called “competition for capital”.”
Page 25 of 75
G) Response – “Investors Should Care” is Irrelevant
Jason Yackee 10 – Whether or not (potential) investors should care about BITs, they don’t; this is consistent
with previous anecdotal evidence
“This evidence of a relative lack of appreciation of BITs by foreign investment decision‐makers is consistent with
the anecdotal evidence already discussed above. It is also broadly consistent with a number of earlier studies of
corporate “political risk” analysis and management. Kobrin ’s work on this subject is perhaps the most well known. In an impressive 1982
study of corporate practice, he found that political risk analysis was often weakly institutionalized, with managers often possessing only a “diffuse, subjective, and
impressionistic” perception of political risk.88 As he noted in an earlier ( 1979 ) study, “most managers’ understanding of the concept of political risk, their assessment
and evaluation of politics, and the manner in which they integrate political information into their decision‐making are all rather general, subjective, and superficial.” This
finding illustrated an “interesting paradox. With very few exceptions, managers rate political instability (or political risk) as one of the major influences on the foreign
investment decision. Yet, again with very few exceptions, the same surveys report the absence of any formal or even rigorous and systematic assessment of political
environments and their potential impact upon the firm”. 89 Kobrin’s findings accorded with various earlier studies from the 1960s, which generally found that “even large
and active [multinational corporations] do not analyze political risk in a very sophisticated manner”.90 They also accord with studies contemporaneous to Kobrin’s own, as
well as more recent studies, which continue to suggest that multinational corporations often implement political risk assessment in ad hoc, weakly institutionalized kinds
of ways. For example, in a 1982 survey that focused on the foreign investment decision making process, Kelly and Philippatos found that multinationals tended to
employ a rather casual attitude toward foreign investment decisions and risk analysis. They concluded that their respondents “seldom compare and rank [prospective]
investments as advocated in normative micro‐investment theory”, the “vast majority of companies do not employ the advocated methods to measure overseas risks”,
“most companies allow for risks by arbitrarily adjusting the required return or payback of a project”, and that “it is obvious that field implementation of risk analysis most
likely leads to suboptimal decisions on FDIs [sic] and market allocation of productive resources”.91 In a 1996 survey of highly internationalized Dutch firms, de
Mortanges and Allers report that the companies used unsophisticated, subjective approaches to political risk analysis. 92 Given the apparently casual approach to
political risk analysis of many multinational corporations, it would not be surprising if those same corporations failed to undertake sophisticated legal analyses of
investment prospects that included, for example, identifying at the pre‐investment stage any relevant investment treaties, understanding the formal content and
associated jurisprudence of those treaties, and plugging that understanding into some sort risk‐adjusted cost benefit analytic framework. Indeed, Lothian and Pistor
have recently report results from a “panel discussion with legal practitioners about the relevance of local institutions to foreign direct investors”.93 The authors find that
“law plays a minor role in the decision to enter a market.”94 They conclude in part that the success of investment projects may often be adequately ensured through
“informal institutions and a broader set of investment relations with different constituencies in the host country” rather than through formal legal instruments or
arrangements.95 Theresults of my survey similarly suggest that corporate decision‐makers approach the analysis of
the intersection of international law and political risk in a way that fails to accord with the implicitly “normative” micro‐
investment theory that underlies studies suggesting that BITs should greatly influence FDI decisions. While scholars
might argue that investors should care deeply about BITs when deciding whether and where to invest, the data
presented above suggests that many investors (and potential investors) don’t.”
Page 26 of 75
Solvency 4: Law & Society Empirics  FDI Ø ↑
A) General: Law & Society Empirics Prove
Law & Society Rev. 08 – Credible commitment theories about BITs miss 3 empirics of law: Legal ignorance,
pluralism, and ambiguity  little if any direct effect on investor behavior
805-832 (EG) (PB)
“Credible commitment theories of BITs ignore the "three distinct [empirical] characteristics of law" identified by
scholars operating in the law and society tradition: legal ignorance, legal pluralism, and legal ambiguity (Suchman &
Edelman 1997:930). These characteristics suggest, in contrast to extant studies, that BITs should not have much if any
direct effect on investor behavior.”
Page 27 of 75
B) Empiric 1: Legal Ignorance
Law & Society Rev. 08 – Compartmentalization of BIT knowledge means investors don’t even know about the
available options
805-832 (EG) (PB)
“Research suggests that decision makers in business often have little accurate knowledge of the content of
governing legal rules. There is, unsurprisingly, also very little evidence that foreign investors have much
knowledge of the existence or content of particular BITs, or much appreciation for the theoretical ways in which
the international legal system might secure their investments. A small survey of business executives conducted in 1976 found that only 16
percent of respondents were "familiar" with the ICSID system generally, and that only 4 percent felt that ICSID provided "adequate safeguards" (Ryans & Baker 1976); a
more recent study confirmed these results (Baker 1987). It appears that BITs and BIT-based arbitration remain an "often overlooked tool" in die legal arsenal of
multinational corporations (Freyer et al. 1998). Even where certain individuals within those corporations might follow BIT developments
(such as lawyers within the general counsel's office), this specialized legal knowledge may fail to flow to the nonlawyer managers
and executives who actually make business decisions. Compartmentalization of knowledge of BITs is probably
exacerbated by the tendency of corporations to have relatively underdeveloped internal systems for evaluating
"political risk" and incorporating those general evaluations into the investment process (Kobrin 1982).”
Page 28 of 75
C) Empiric 2: Legal Pluralism
Law & Society Rev. 08 – Host states that desire FDI likely have powerful, attractive incentives rendering BITs
largely redundant
805-832 (EG) (PB)
“Credible commitment theories of BITs tend to ignore alternative informal and formal institutions that might
successfully resolve problems of obsolescing bargain, rendering BITs, as credible commitment devices, largely
redundant. For example, credible commitment theories of BITs often seem to uncritically adopt a view of investor-host
state relations where "one-shot transactions are performed largely because of the threat of the [international legal]
sanctions that follow a breach" (Macaulay 1984:523), a view that leads them to assume that obsolescing bargain-type risks are, in the absence of formal
legal sanctions, quite severe. But transactions between host states and investors are never one-shot affairs, nor are they isolated from host state transactions involving
Host states that desire future foreign investment are likely to have powerful reputational incentives to
other investors.
treat current foreign investors favorably, regardless of the existence of any international treaty commitments - e.g., regardless of any
formal threat of international legal sanction.4 Foreign investors rely to a great extent, and perhaps primarily, on
the views and experiences of other investors when deciding to invest (Spar 1998). Unfavorable host state behavior is likely to have
strong ripple effects beyond the investment immediately affected, as other investors withdraw from the host state, and as potential investors redraw their investment
plans. This threat of "gossip and ostracism" (Suchman & Edelman 1996:931) may be sufficient to render obsolescing bargain risks relatively slight, meaning that BITs have
This is especially likely in the natural resources sector, where , as KoIo and Walde note, reputations
little risk-reducing role to play.
for living up to one's bargains "become known quite rapidly in the rather narrow community" of relevant players
and where both host states and investors "often welcome being seen as reasonable partners with whom one can
do business" (2000:6).”
Law & Society Rev. 08 – Investment contracts exist as an alternative to BITs and are just as enforceable against
state as BIT based arbitrations
805-832 (EG) (PB)
“Buteven if a host state's general reputational interest in maintaining a favorable investment climate is insufficient
to render problems of credible commitment negligible, foreign investors have long had the ability to create their
own individualized "BITs" in the form of a legally binding investment contract. 5 Investment contracts are especially common in the
highest-risk investment sectors (natural resource concessions and infrastructure development), and are often required as a condition for obtaining project financing or
investment insurance. Investment contracts typically include binding, enforceable agreements to arbitrate investment
disputes. These contract-based arbitration agreements often reference the very same arbitral facilities named in
BITs (e.g., the ICC or ICSID), and they, as well as any resulting arbitral awards, are just as enforceable against host states
as are BIT-based arbitrations and awards.”
Page 29 of 75
D) Empiric 3: Legal Ambiguity
Law & Society Rev. 08 – Substantive ambiguity renders it difficult if not impossible for an investor to predict
how a tribunal would interpret or apply BIT promises in any given situation
805-832 (EG) (PB)
“The substantive promises contained in BITs consist almost entirely of highly ambiguous standards of uncertain
meaning and application. This ambiguity is arguably so great that the treaties "may best be conceptualized not as
an objective external constraint but rather as a source of uncertainty" (Suchman & Edelman 1996:932). Substantive
ambiguity means that arbitral tribunals have trouble interpreting or applying the treaties consistently, a problem
that has lead some observers to claim that the BIT system is suffering from a "legitimacy crisis" (Franck 2005).
Substantive ambiguity also means that the treaties are unlikely to be of much concrete use to investors in the
investment-planning process, as it is difficult, if not impossible, for the investor to determine a priori how a
tribunal will interpret or apply a given promise in a given fact situation.”
Page 30 of 75
E) Impact: Investment Decisions Ø Effected
Law & Society Rev. 08 – Three critiques  little reason to think that BITs have a significant effect on
investment decisions
805-832 (EG) (PB)
“If these three critiques are accurate, it suggests that we should be skeptical of claims that BITs are or should be
causally associated with massive increases in foreign investment. If investor knowledge of BITs is weak; if
reputational concerns are sufficient to render obsolescing bargain-type risks objectively low; if the widespread
use of investment contracts means that BITs add very little to the formal law-based "credible commitment" table
than was already available to investors on an individualized basis; and if the substantive content of BITs is too
uncertain to aid in rational business planning, then there is little reason to expect the presence or absence of a
particular treaty to have any significant effect on particular investment decisions.”
Law & Society Rev. 08 – Research indicates that investors are unlikely to give the (non)existence of BITs
decisive weight
805-832 (EG) (PB)
“The discussion above suggests competing theoretical expectations. The standard credible commitment theory of BITs suggests that
BITs should meaningfully impact investment decisions, and that this impact should be greatest in regard to the
formally strongest treaties. On the other hand, research in the law and society tradition suggests a more
pessimistic assessment: for reasons of legal ignorance, pluralism, and ambiguity, even the formally strongest BITs
are unlikely to be associated with significant increases in foreign investment, as investors are unlikely to give the
presence or absence of the treaties decisive weight.”
Law & Society Rev. 08 – BITs have little or no impact on investment decisions; b/c formal law has little effect on
private behavior
805-832 (EG) (PB)
“The standard credible commitment story of BITs suggests that the treaties have great promise to increase
foreign investment to developing countries by using the formal trappings of international law to prevent host
states from treating investors badly. My contribution has been to take this story seriously by examining whether the formally strongest treaties are
statistically associated with increased FDI. While I find some tentative evidence that privatization programs and the World
Bank's investment insurance program may promote FDI, my results suggest that BITs have little or no impact on
investment decisions, a result consistent with research suggesting that the formal trappings of law often have
only modest effects on private behavior.”
Page 31 of 75
IPR Disadvantages – Uniqueness and Link
A) Uniqueness: Russian IPR Enforcement Bad Now
Coalition for IPRs 10 – Lack of political dedication undermines Russian enforcement, the key to protection
Coalition for Intellectual Property Rights [The Coalition for Intellectual Property Rights (CIPR) is a private-public partnership dedicated
solely to the advancement of intellectual property protection and reform in the Baltic States, Russia, Ukraine, and other countries of the
former Soviet Union; CIPR is accredited with formal Observer Status by the intergovernmental CIS Interstate Council on Industrial
Property Protection. The U.S.-Russia Business Council is an Associate Member of CIPR] “Intellectual Property Rights: A Key to Russia’s
Economic Revival” 2010 <accessed July 12, 2010> http://www.cipr.org/activities/articles/RBWipr.pdf (EG)
“However, the
key to adequate IPR protection is enforcement, and Russia’s lack of enforcement of existing IP law is a
major impediment to improving the IPR climate in the country. Many CIPR survey respondents believe that the
Russian government and its leading politicians underrate IPR protection as a public policy priority.”
Page 32 of 75
B) Internal Link: BITs Enhance IPRs
Journal of World IP 01 – BITs promote adequate and effective enforcement of intellectual property
Peter Drahos [Professor in Law and the Director of the Centre for the Governance of Knowledge and Development in the Regulatory
Institutions Network, College of Asia and the Pacific, at the Australian National University, Canberra; He currently holds a Chair in
Intellectual Property at Queen Mary, University of London; Herchel Smith Senior Fellow in Intellectual Property, Queen Mary College,
University of London] “BITS and BIPS: Bilateralism in Intellectual Property” THE JOURNAL OF WORLD INTELLECTUAL PROPERTY Volume
4, Issue 6, pages 791–808 (November 2001)
“Broadly speaking, the belief is that foreign investment and trade flows are intimately related and that
liberalizing the rules on investment will also enhance trade. Adequate and effective protection for intellectual
property is an explicit goal of the U.S. BIT Program. The Nicaraguan BIT, like other BITS, does not set specific standards of intellectual
property. Instead, it protects the rights of investors who use intellectual property as a mode of investment. The BIT
accomplishes this by including intellectual property in its definition of investment (much like the draft MAI did). Intellectual
property is defined widely to include copyright, patents, rights in plant varieties, designs, semi-conductor chips, trade secrets, trade and service marks and trade names.
The licensing of intellectual property also falls within the meaning of investment since the definition of
investment includes “rights conferred pursuant to law, such as licences and permits.”7”
Journal of World IP 01 – BITs create obligations to enforce TRIPs within a reasonable time
Peter Drahos [Professor in Law and the Director of the Centre for the Governance of Knowledge and Development in the Regulatory
Institutions Network, College of Asia and the Pacific, at the Australian National University, Canberra; He currently holds a Chair in
Intellectual Property at Queen Mary, University of London; Herchel Smith Senior Fellow in Intellectual Property, Queen Mary College,
University of London] “BITS and BIPS: Bilateralism in Intellectual Property” THE JOURNAL OF WORLD INTELLECTUAL PROPERTY Volume
4, Issue 6, pages 791–808 (November 2001)
“Typically, a BIT creates MFN obligations and national treatment obligations for the parties to the treaty. These
principles are not of much use to U.S. investors if the developing country in question does not have intellectual
property laws, has low standard law or is taking advantage of the transitional provisions under TRIPS MFN and national treatment in bilateral treaties have the
effect of equalising treatment but not of raising standards within a country. It is for this reason that “prospective BIT partners are generally
expected, at the time the BIT is signed, to make a commitment to implement ... TRIPS Agreement obligations
within a reasonable time.”* If this expectation is not met, the United States is ready to use its 301 process to
secure the necessary commitment (on t h s as a negotiating strategy see Section VII).”
Anderson & Razavi 10 – TRIPS failed in its basic mission: but BITs have raised the standards
“On the heels of thirty-five years of BITs, the TRIPS [Trade related Aspects of Intellectual Property Rights]
agreement set out to deliver a level playing field for all IPR players by eschewing the bilateral BITs model in favor of a multilateral
model. The multilateral framework was appealing because it brought together many scores of nations as one big group. These nations then negotiated and agreed to
common investment terms en masse, instead of simply in pairs. Regrettably, much like other multilateral regimes that preceded it, TRIPS
has failed in its basic mission. It did not effect a comprehensive, level playing field with respect to IPR protection.
Instead, TRIPS merely established a baseline of minimum protections. This is evidenced by the fact that in the years since TRIPS’s adoption, BITs have proliferated more
rapidly than ever before. Thus, the multilateral TRIPS regime did not do away with the preexisting bilateral BITs regime. Instead, it simply added to it. Today, TRIPS
and BITs represent two core layers of nation-to-nation IPR protection mechanisms. In most cases , the new fleet of post-
TRIPS BITs have raised the standards set forth in TRIPS.”
Page 33 of 75
C) Internal Link: Plant and Animal Patents
Anderson & Razavi 10 – BITs have resulted in the inclusion of plants and animals in signatories’ patent laws
“BITs represent the latest wave of IPR protection. BITs are bilateral agreements, typically between a developed nation and a
developing one, which establish additional IPR commitments that are layered upon preexisting IPR obligations set
forth in TRIPS and other agreements.73 Various influential industry interests are the key drivers behind these
increases in standards.74 In practice, this has meant that plants and animals, for example, can no longer be
excluded from signatory nations’ patent laws.75”
Page 34 of 75
Disadvantage 1: Capital Controls
A) Link: Russian Economic Recovery
Congressional Research Service 10 – Russia’s economy has been hit hard by the global financial crisis (5.6%
decreased GDP)
7 Authors Jim Nichol, Coordinator [Specialist in Russian and Eurasian Affairs] William H. Cooper [Specialist in International Trade and
Finance] Carl Ek [Specialist in International Relations] Steven Woehrel [Specialist in European Affairs] Amy F. Woolf [Specialist in Nuclear
Weapons Policy] Steven A. Hildreth [Specialist in Missile Defense] Vincent Morelli [Section Research Manager] “Russian Political,
Economic, and Security Issues and U.S. Interests” RL33407 (January 29, 2010) CONGRESSIONAL RESEARCH SERVICE <accessed July 23,
2010> www.opencrs.com (EG)
“As is the case with most of the world’s economies, the Russian economy has been hit hard by the global
financial crisis and resulting recession. However, even before the financial crisis, Russia was showing signs of economic problems when world oil prices
plummeted sharply around the middle of 2008, diminishing a critical source of Russian export revenues and government funding. The financial crisis brought
an abrupt end to about a decade of impressive Russian economic growth that helped raise the Russian standard of living and
brought economic stability that Russia had not experienced for more than two decades. Russia had experienced strong
economic growth over the past 10 years (1999-2008), during which time its GDP increased 6.9% on average per year in contrast to an average annual decline in GDP of
6.8% during the previous seven years (1992-1998). In 2008 and into 2009, however, Russia faced a triple threat with the financial crisis coinciding with a rapid decline in
the price of oil and the costs of the country’s military confrontation with Georgia. These
events exposed three fundamental weaknesses in
the Russian economy: substantial dependence on oil and gas sales for export revenues and government revenues, a rise in
foreign and domestic investor concerns, and a weak banking system. The economic downturn is showing up in Russia’s performance
indicators. Although Russia’s real GDP increased 5.6% in 2008 as a whole, it declined during the final two quarters of
that year and continued to decline the first two quarters in 2009 It declined an estimated 8.0% in 2009, although began
to show signs of recovery, albeit weak, in the last quarter of 2009.28 The Russian government has implemented a number of stimulus programs to boost economic
growth. Oil, natural gas, and other fuels account for about 65% of Russia’s export revenues. In addition, the Russian government is dependent on taxes on oil and gas sales
for more than half of itsrevenues. Oil prices have been very volatile in the last two years which have affected the Russian economy. As of January 22, 2010, the price of a
barrel of Urals-32 (the Russian benchmark price) oil was $75.06, a 45.5% drop from its July 4, 2008, peak of $137.61 but a 119.5% rise from its January 2, 2009 low point of
$34.02. The volatility has challenged Russian fiscal policy. The
drop in oil prices forced the government to incur a budget deficit in
2009 estimated to be around 7% of GDP; however, the rise in oil prices during the later months of 2009 prevented the deficit from being even
higher.29 Russian foreign currency reserves declined from $597 billion at the end of July 2008 to $368 billion at the end of April 2009, but have since increased to $436
billion as of January 22, 2010. 30”
Page 35 of 75
B) Internal Link: Outdated Capital Controls
Sarah Anderson 09 – US BIT model reflects an outdated stance on capital control that fails to protect the
integrity of the financial system
Economic Policy; Co-author of the books Field Guide to the Global Economy and Alternatives to Economic Globalization] “COMMENTS
ON THE U.S. MODEL BILATERAL INVESTMENT TREATY BEFORE THE UNITED STATES DEPARTMENT OF STATE AND THE OFFICE OF THE U.S.
TRADE REPRESENTATIVE” July 17, 2009 INSTITUTE FOR POLICY STUDIES <accessed August 28, 2010> (EG)
“The U.S. model bilateral investment treaty reflects an outdated position that capital controls are virtually always
bad and should be prohibited. Article 7 obliges governments to "permit all transfers relating to a covered investment to be made freely and without delay
into and out of its territory" and “in a freely usable currency.” The model treaty offers no exceptions for capital controls used in the
context of a financial crisis, even if they are temporary and nondiscriminatory. Article 20(2)(a) does state that "nothing in this
Treaty applies to nondiscriminatory measures of general application taken by any public entity in pursuit of monetary and related credit policies or exchange rate
Exceptions that do
policies." However, the text makes clear that this paragraph does not apply to a government's obligations under Article 7 on Transfers.
exist in the model treaty (see Article 7(4)) are extremely limited and inadequate to protect policies aimed at safeguarding the
integrity of the state's financial system. Most of these exceptions allow governments to introduce restrictions only after economic problems arise,
rather than acting to prevent crisis. For example, if a state’s laws require that firms under bankruptcy protection be prevented from sending capital out of the country,
Moreover, all of the exceptions must be carried out through the
then transfers restrictions can be applied on these firms.
“equitable, non-discriminatory, and good faith application” of the state’s laws – vague terms subject to the
interpretation of arbitration tribunals.”
Sarah Anderson 09 – US capital control policy is outdated; capital controls helped countries insulate against the
financial crisis
“While the U.S. model treaty has remained rigid on capital controls, there has been a major rethinking of this
issue in the economics field. The International Monetary Fund (IMF) abandoned its blanket opposition to capital
controls after several countries used these measures effectively to avoid the worst impacts of the Asian crisis in
the late 1990s."2 In recent years, the Fund has advised at least two countries, Bulgaria and Croatia, to strengthen
one type of capital control, reserve requirements on capital inflows.3 And when Iceland imposed controls on capital outflows in the aftermath of the
country’s banking sector meltdown, the IMF advised the government “not to lift these restrictions before stability returns to the foreign exchange market.”4 A March
2009 IMF report notes that "The existence of capital controls in several countries and structural factors have helped to moderate both the direct and the indirect effects
IMF chief economist Kenneth Rogoff underscored this point in a New York Times article
of the financial crisis."5 Former
about India, in which he stated that the country’s stringent capital controls were helping to insulate that nation
from the current crisis.6 Columbia University economist Jagdish Bhagwati, a strong advocate of trade liberalization, and many others have pointed
out that there is little to no evidence that capital account liberalization is necessary for developing countries to
attract foreign investment. In fact, six of the top ten non-OECD foreign direct investment recipients [including
Russia] (China, Hong Kong, Russia, Brazil, Saudi Arabia, and India) have never signed a U.S. agreement restricting capital controls. 7”
Page 36 of 75
Sarah Anderson 09 – As the crisis furthers, the US is eroding capital controls (proven effective) through BITs
“As the global economy descends further into crisis, many governments are searching their tool bags for instruments to protect their people
from the ravages of financial volatility. Dozens of governments are lacking one particular tool that has proved effective in past
crises: capital controls. For more than 20 years, the U.S. government has pushed other governments to give up
their power to restrict the speed with which money flows in and out of financial markets. This effort was part of a broader
agenda to handcuff policymakers, limiting their ability to intervene in the economy in ways that curb the power of global corporations and financial firms. U.S.
officials have eroded capital controls both indirectly, through their influence with international financial institutions, and also directly, through
bilateral investment treaties and the investment chapters of trade agreements. To put teeth into these deals, they required that
governments respect the “rights” of investors to file claims against them in international tribunals.”
Sarah Anderson 09 – The US restricts capital controls through BITs and FTAs
“The United States has negotiated restrictions on capital controls through both bilateral investment treaties
(BITs) and free trade agreements (FTAs) with 52 national governments. In the 1980s, U.S. officials began pursuing BITs,
primarily with developing countries. These deals require each party to uphold long lists of investor rights, including the
right to transfer capital into and out of their territory “freely and without delay.” To date, the United States has
forged 40 such treaties that have entered into force. Another seven BITs have been signed but not yet ratified. 6”
Page 37 of 75
C) Link: Decreased Policy Space
Prabhash Ranjan 09 – BITs restrict the policy space of host nations, particularly their ability to regulate in the
event of an economic crisis
assume that signing BITs positively influences foreign investment, there are other factors about
“Even if India were to
BITs that are worth considering. There is a growing literature to show that BITs restrict the space of a host nation (investment
receiving country) to pursue policies in the national interest, such as imposing restrictions on foreign investors in the
event of an economic crisis. The restriction on policy space by BITs arises because majority of BITs are structured
purely from the perspective of foreign investors, granting them extensive rights without recognizing the right of
sovereign states to regulate in the national interest. For example, most BITs, and this includes BITs entered by India, bind the host
nation not to discriminate between foreign and national investments, allow full repatriation of income in foreign
exchange to the home country of the investor, provide an extremely wide definition of foreign investment which
includes portfolio investment and intellectual property rights, and provide very high compensation criteria for
both direct and indirect expropriations with very limited manoeuvrability to the host state.”
Page 38 of 75
D) Brink: Economic Recovery
Sarah Anderson 09 – Capital controls have effectively addressed financial market volatility, yet the US
continues to forge agreements restricting capital controls
Many countries have used capital controls effectively to address financial market
“■■U.S. Web of Capital Control Limits:
volatility. And yet 52 national governments face restrictions on the use of capital controls as the result of trade or
investment agreements with the United States. These countries include 19 in Eastern Europe and Central Asia, 18 in the Americas and the
Caribbean, 6 in the Middle East and North Africa, 5 in Sub-Saharan Africa, 2 in South Asia, and 2 in East Asia and the Pacific.
The International Monetary Fund abandoned its blanket opposition to capital
■■ IMF Learns from Asian Crisis, U.S. Does Not:
controls after some countries used this tool to avoid the worst effects of the Asian financial crisis that erupted in
1997. The U.S. government, on the other hand, forged ahead after that global catastrophe, initiating agreements
restricting the use of capital controls with 22 more countries. Such restrictions are also in the pending U.S.-Colombia Free Trade
Agreement.”
Page 39 of 75
Sarah Anderson 09 – Capital Controls Quotes
Page 40 of 75
E) Response – Historical Precedent – Russian Capital Account Convertibility
Bhagwati & Meyer 03 – Russia would have done better after the Asian crisis had it used capital controls
Jagdish Bhagwati [Professor of Economics, Columbia University] & Andre Meyer [Senior Fellow in International Economics, Council on
Foreign Relations] Testimony before the U.S. House of Representatives Committee on Financial Services Subcommittee on Domestic and
International Monetary Policy, Trade and Technology – (Tuesday, April 1, 2003) (EG)
“But consider a yet different, third question: you have gone to capital account convertibility, like Malaysia had, and capital starts leaving in huge amounts due to panic. Do
you then clamp down capital controls? So, we are then considering using capital controls when capital is leaving, not to moderate its size when it is entering. Here, again,
there seems to be a sound body of opinion that Malaysia did well to use capital controls. The reason is that, by
segmenting the capital markets (as noted
by many economists at the time, including Paul Krugman and Dani Rodrik), Malaysia
managed to lower interest rates compared to what
would have been necessary otherwise because of rising interest rates elsewhere, and thus Malaysia managed to
follow an expansionary policy that enabled it to escape the deflation that followed rising rates in other afflicted
countries which followed the wrongheaded deflationary conditionality imposed by the IMF in the first year of the Asian crisis. Again,
for Russia, the Russian scholar Padma Desai of Columbia University has argued that Russia would have done
better in the aftermath of the Asian crisis if de facto capital account convertibility had been immediately
suspended temporarily.”
Page 41 of 75
F) Response – Historical Precedent – Chilean Encaje
Sarah Anderson 09 – Chile’s encaje allowed it to fare better than most others during the peso crisis ’94 & Asian
crisis
“Chile is often cited as an example of effective use of capital controls through an ongoing policy. Throughout
most of the 1990s, the Chilean government subjected capital inflows to the encaje (“strongbox” in Spanish)— a one
year, non-interest paying deposit with the central bank. The deposit requirement varied from 10% to 30%, and the penalty for early
withdrawal ranged from 1% to 3%. Chile faired better than most other Latin American countries during the Mexican peso
crisis in 1994 and the Asian crisis a few years later. While the role of capital controls has been intensely debated, an IMF research
review concluded that Chile’s encaje, combined with other financial sector reforms, allowed the government
more monetary policy autonomy and shifted the composition of foreign investment towards the longer term. 14”
Page 42 of 75
G) Response – Historical Precedent – Malaysian Capital Controls
Sarah Anderson 09 – Malaysia’s capital controls prove that countries are better off with them as a possibility
2009) INSTITUTE FOR POLICY STUDIES <accessed August 31, 2010> www.IPS-DC.ORG (EG) [Brackets Added]
“Malaysia adopted capital controls at a moment when the sun was decidedly not shining. At the height of the
Asian financial crisis in 1998, the government abruptly imposed a mix of exchange and capital controls . “It was the
moment of truth,” explains Third World Network Director Martin Khor. “They had followed the IMF policies for a year and the economy had still collapsed. Fortunately,
our Prime Minister was not an economist– it’s what saved Malaysia. He ignored the economists and put in place common sense policies.”16 The Malaysian controls
prevented repatriation of capital for one year, an action that would be a clear violation of standard U.S. investment and trade
agreements. The government also banned transfers between domestic and foreign accounts, fixed the local currency to the U.S. dollar, and restricted the amount
of currency and investments that residents could take abroad. An IMF report in 2000 gave the Malaysian plan a fairly favorable review: “In conjunction with other
macroeconomic and financial policies, the controls helped to stabilize the exchange rate. Since the introduction of the controls, there have been no signs of speculative
pressures on the exchange rate, despite the marked relaxation of fiscal and monetary policies to support weak economic activity. Nor have there been signs that a parallel
[former World Bank Chief
or non deliverable forward market is emerging; and no significant circumvention efforts have been reported.”17 Three years later,
Economist, Joseph] Stiglitz wrote that “it was clear that Malaysia’s capital controls allowed it to recover more
quickly with a shallower downturn, and with a far smaller legacy of national debt burdening future growth. The
controls allowed it to have lower interest rates than it could otherwise have had; the lower interest rates meant
that fewer firms were put into bankruptcy and so the magnitude of publicly funded corporate and financial
bailout was smaller. The lower interest rates meant too that recovery could occur with less reliance on fiscal policy, and consequently less government
borrowing. Today, Malaysia stands in a far better position than those countries that took IMF advice.”18 Of course no one argues that capital controls
are effective 100% of the time. Wily investors often find ways to evade them. There are risks of high administrative costs, of
unintentionally discouraging valuable investment, and of distracting from the root causes of financial instability. However, a growing number of noted
economists maintain that on balance, governments are better off with capital controls in their tool bag than
without them.19 (See box, p. 10-11.)”
Page 43 of 75
H) Impact 1: Anti-American Backlash
Sarah Anderson 09 – The presence of capital controls enforced by the US in an economic crisis would result in
anti-American backlash
“Businesses, workers, and the environment in this country are undermined by instability in other parts of the
world, as crisis countries purchase fewer U.S. products, cut environmental spending, and expand the global pool
of unemployed labor. And when governments are constrained in their use of capital controls, they have few
other tools to prevent speculative bubbles or stem panic-driven capital flight. Dramatically raising interest rates may slow capital
outflows, but at the risk of causing a serious recession. Mexico, which has extremely limited authority to apply capital controls under the investment rules in the North
American Free Trade Agreement, has resorted to depleting its foreign reserves in the face of massive capital flight (foreign investors withdrew more than $22 billion in the
last few months of 2008).11 Struggling to prop up the value of its currency, the central bank has spent $27.5 billion from its foreign reserves since last October.12
Depleting reserves to fight devaluation not only reduces the funds available for development, it also raises the risk of even further capital flight, as low reserve levels
undermine investor confidence. In another attempt to restore confidence, the Mexican government has opened a $47 billion line of credit with the IMF, raising the
prospect of another debt crisis that could undermine development and stability in the United States’ southern neighbor for many years to come. Daniel Tarullo, a member
of the Federal Reserve Board, has spoken out forcefully against the U.S. government’s insistence on including capital control restrictions in trade agreements —
restrictions that are nearly identical to those in the model BIT. In testimony during the debate over the Chile and Singapore free trade agreements in 2003, Tarullo
described this as not only “bad financial policy and bad trade policy,” but also “bad foreign policy.” He went on to lay out what would likely happen if a government bound
“As the country struggles to emerge from its recession…
by these rules were to use short-term capital controls during a severe financial crisis:
U.S. investors file their claims for compensation. And, of course, under the bilateral trade agreement they are
entitled to that compensation. Thus the still-suffering citizens of the country are treated to the prospect of U.S.
investors being made whole while everyone else bears losses from an economic catastrophe that has afflicted the
entire nation. Regardless of what one thinks of the merits of capital controls, one would have to be naïve not to
think that an anti-American backlash would result.”13”
Page 44 of 75
I) Impact 2: Anarchy
VA J. of Intl. L. 08 – Social and political anarchy followed the Argentine financial collapse
William W. Burke-White [Assistant Professor of Law, University of Pennsylvania Law School. Ph.D. (Cambridge, 2006); J.D. (Harvard,
2002), M.Phil. (Cambridge, 2000), B.A. (Harvard, 1998).] & Andreas Von Staden [Ph.D. Candidate, Princeton University; M.A. mult.
(Princeton, 2006; Yale, 2000; Hamburg, 1998).] “Investment Protection in Extraordinary Times: The Interpretation and Application of
Non-Precluded Measures Provisions in Bilateral Investment Treaties” VIRGINIA JOURNAL OF INTERNATIONAL LAW [Vol. 8, No. 2, (2008)]
(EG) (PB)
“In the last weeks of 2001, Argentina experienced a financial collapse of catastrophic proportions. 1 In one day
alone, the Argentine peso lost 40% of its value.2 As the peso collapsed, a run on the banks ensued. According to
The Economist, throughout the collapse, “income per person in dollar terms…shrunk from around $7,000 to just
$3,500” and “unemployment [rose] to perhaps 25%.” 3 This economic chaos meant that by late 2002, over half the
Argentine population was living below the poverty line.4 The crisis soon spread from the economic to the political
sphere. In December 2001, one day of riots left 30 civilians dead and led to the resignation of President Fernando
de la Rua and the collapse of the government. A “tragicomic spectacle of a succession of five presidents taking
office over a mere ten days” followed.5”
Page 45 of 75
J) AT: NPM Clause
VA J. of Intl. L. 08 – Argentina’s NPM claims have been met with contradictory rulings; indicative of very
different understandings of NPM bargains and functions
William W. Burke-White [Assistant Professor of Law, University of Pennsylvania Law School. Ph.D. (Cambridge, 2006); J.D. (Harvard,
2002), M.Phil. (Cambridge, 2000), B.A. (Harvard, 1998).] & Andreas Von Staden [Ph.D. Candidate, Princeton University; M.A. mult.
(Princeton, 2006; Yale, 2000; Hamburg, 1998).] “Investment Protection in Extraordinary Times: The Interpretation and Application of
Non-Precluded Measures Provisions in Bilateral Investment Treaties” VIRGINIA JOURNAL OF INTERNATIONAL LAW [Vol. 8, No. 2, (2008)]
(EG) (PB)
“Two of the BITs under which cases have been brought against Argentina— the U.S.-Argentina BIT and the Belgium-
Luxembourg Economic Union-Argentina BIT (BLEU-Argentina BIT)—include NPM clauses. 349 In each of these cases Argentina has
invoked the NPM clause,350 arguing that the measures it took were not precluded by the BIT, that there was no internationally wrongful act, and, hence, no
compensation is due to investors. Moreover, based on the long-standing United States policy of self-judging NPM clauses, Argentina has claimed that the NPM provision
in the U.S.-Argentina BIT is selfjudging and Argentina’s invocation of the clause subject only to good faith review.351 Though
more than forty cases are
presently pending against Argentina, only four awards involving NPM clauses have been handed down by ICSID
tribunals as of October 2007.352 The four awards illustrate both the interpretive challenges presented by NPM
clauses and the dangers of interpretive short-cuts by arbitral tribunals. Moreover, the four awards highlight very
different understandings of the risk allocation functions of NPM clauses. Whereas the tribunals in the cases of CMS v. Argentina,
Enron v. Argentina and Sempra v. Argentina found the NPM clause inapplicable, the tribunal in LG&E v. Argentina found the clause properly invoked and Argentina’s
liability precluded for a specified period during the crisis.353 Though
the contradictory outcomes cannot be reconciled, they can be
explained by the tribunals’ very different understandings of the bargain that lies behind the U.S.-Argentina BIT
and the risk allocation function of the NPM clause in the treaty.”
K) AT: Not Russia Specific
L) AT: Not Current Crisis Specific

Sarah Anderson 09 – The effects of both crisis’s are very similar; Russia may be considering some type controls
in light of billions in capital flight
“Although the current crisis originated in the United States rather than Asia, the effects on the rest of the world
are reminiscent of those in the late 1990s crisis—plunging stock markets, withering consumer confidence, capital
flight, and currency devaluations. In the face of this spreading crisis, some countries have maintained capital controls (e.g., China37 and Thailand38),
while others have imposed or tightened them (e.g., Iceland,39 Ukraine,40 and Argentina41). There has been much speculation that Russia may
be considering some type of controls, as it continues to hemorrhage capital in the midst of both the financial
crisis and the conflict with Ukraine. In 2008, the country lost a record $130 billion through capital flight. 42 Other
countries facing severe capital flight are as farflung as Pakistan, Indonesia, South Korea, Mexico, and Nigeria.”
Page 46 of 75
Disadvantage 2: Drug Access
A. Link: Drug Access Denied
Boldrin & Levin 08 – IPR increases prices on AIDs drugs which places them out of the reach of Africa
Michele Boldrin PhD [Professor of economics; fellow of the Econometric Society; research associate of the Center for Economic Policy Research in London and for FEDEA in
Madrid.] David K. Levine PhD [John H. Biggs Distinguished Professor of Economics at Washington University in St. Louis; President of the Society for Economic Dyamics;
fellow of the Econometric Society; research associate of the NBER; member of the Sloan Research Fellowship Program Committee;co-editor of NAJ Economics]
“Against Intellectual Monopoly” January 2, 2008 [EG] <accessed 19/01/09> http://www.dklevine.com/papers/imbookfinalall.pdf
“AIDS drugs are relatively inexpensive to produce. They are so sufficiently inexpensive to produce that the
benefits to Africa in lives saved exceed the costs of producing the drugs by orders of magnitude. But the large
pharmaceutical companies charge such a large premium over the cost of producing the drugs – to reap profits from sales
in Western countries where those drugs are affordable – that African nations and individuals cannot afford them. They create artificial
scarcity – excluding Africa from AIDS drugs – in order to garner a higher price for their product in the U.S. and
Europe.”
Cato Institute 00: Patent right Drugs are out reach of most sick Africans
Michael Kremer is a senior fellow at the Brookings Institution, a professor of economics at Harvard University, and a faculty fellow at the
Center for International Development, Harvard University. At the time this article was written, Rachel Glennerster was a visiting scholar
at the Center for International Development at Harvard University. She is currently a staff member at the International Monetary Fund.
The views expressed here, as well as any errors, are the sole responsibility of the authors and do not necessarily reflect the opinions of
the Executive Directors of the IMF, or other members of the IMF staff. {Regulation Volume 23, No. 2 August 28, 2000}
http://www.cato.org/pubs/regulation/regv23n2/kremer.pdf
“The monopoly pricing of patented goods prevents some people who need those goods from buying them. This
problem is illustrated vividly by the recent dispute between the United States and South Africa over aids drugs.
Up to 20 percent of pregnant women in South Africa are infected with HIV. Aids drugs cost more than $10,000
annually, well beyond the reach of most South Africans. Alternative, generic versions of the drugs would be much
cheaper, but buying these products would violate the patent rights of the original drug developers. ”
Cato Institute 00: Under the status-quo current institutions Patents prevent people from obtaining drugs they
need to Survive
Michael Kremer is a senior fellow at the Brookings Institution, a professor of economics at Harvard University, and a faculty fellow at the
Center for International Development, Harvard University. At the time this article was written, Rachel Glennerster was a visiting scholar
at the Center for International Development at Harvard University. She is currently a staff member at the International Monetary Fund.
The views expressed here, as well as any errors, are the sole responsibility of the authors and do not necessarily reflect the opinions of
the Executive Directors of the IMF, or other members of the IMF staff. {Regulation Volume 23, No. 2 August 28, 2000}
http://www.cato.org/pubs/regulation/regv23n2/kremer.pdf
“To enable its citizens to obtain aids drugs more cheaply, South Africa is considering legislation to compel patent
holders to license their discoveries to generic manufacturers and to allow the importing of cheap generic drugs
from countries that do not respect the original patents. Opponents of the legislation argue that if intellectual
property rights are not respected, private firms will lose their incentive to develop new drugs. The United States initially
opposed the legislation. However, when aids activists began protesting against Al Gore, who had raised the issue as a chair of the U.S.-South Africa Binational
Commission, the United States rapidly backed down. The issues raised by the confrontation are deep. Patents, and the resulting legal monopolies,
create incentives for research and development that drive medical progress. But under our current institutions,
those same patents can sometimes prevent people from obtaining drugs that they need to survive.”
Page 47 of 75
Globalization and Health 07 – High prices bar developing countries from access to new drugs
Greg Martin [Science and Research Department, World Cancer Research Fund] Corinna Sorenson [London School of Economics] and
Thomas Faunce [College of Law, Medical School, Globalization and Health Project – Centre for Governance of Knowledge and
Development, Australian National University, Australia] “Balancing intellectual monopoly privileges and the need for essential
medicines” Globalization and Health, Vol. 3, No. 4, (June 12, 2007) <accessed May 30, 2010> [EG] http://ssrn.com/abstract=1408836
high prices for brand name and patented pharmaceuticals often create a barrier to access in developing
“Second,
countries. Patent monopoly protection of new drugs allows the inventing company sufficient time to recoup their
controversially-estimated R&D costs. Sponsors, however, often seek extra patent reward for innovation via a number of existing 'loopholes'. For
example, companies often use bilateral trade agreements to eliminate reference pricing that bases the price of a new drug on pharmacoeconomic evidence, such as its
Such tactics make patented medications prohibitively
efficacy, safety, and cost effectiveness relative to comparable existing therapies.
expensive for people living in poorer countries. As a result, international trade agreements have become an
exceedingly important issue for access to essential medicines and health services.”
Page 48 of 75
B. Impact 1: Death
AfricaFocus 05: A hike in prices will cause thousands of death
AfricaFocus This website features high-quality analysis and progressive advocacy on African issues, with particular attention to priority
issues affecting the entire continent. “India/Africa: Threat to Generic Drugs” Mar 7, 2005 [EG] <accessed 01/12/09>
http://www.africafocus.org/docs05/ind0503.php
“Many patients need this second line of medications to survive. At least 20% of patients need these drugs after
three years of taking the initial course, and if they do not get the medication they will die. The costly, brand-name
versions are out of reach of most people living with AIDS. Brand-name versions of these drugs can cost 26 times as much as the generic
versions that India could make under appropriate and flexible patent standards. The global goal for the end of this year is to deliver AIDS medication to 3 million of the
people that need them. 20% of these people can be expected to need these second line drugs in three years time, and that adds up to 600,000 people! These 600,000
people could die without continued access to affordable medication.”
Bird & Cahoy 07 – Drug controls can cost thousands of lives

Robert C. Bird [Assistant Professor, School of Business, University of Connecticut] & Daniel R. Cahoy [Associate Professor of Business Law,
Smeal College of Business, the Pennsylvania State University] “The Emerging BRIC Economies: Lessons from Intellectual Property
Negotiation and Enforcement” NORTHWESTERN JOURNAL OF TECHNOLOGY AND INTELLECTUAL PROPERTY, Vol. 5, No. 3, pp. 400-
425(Summer 2007) <accessed June 17, 2010> (EG)
“Like many nations in the developing world, citizens of the BRIC economies are badly in need of medicines
invented and sold by the very multi-national organizations pressing for strong protection. Whereas restrictions on
cell phone technology or Harry Potter books are rarely fatal, controls of any sort on anti-retroviral drugs and
other medicines can cost thousands of lives.”
Page 49 of 75
C. Impact 2: Public Health
CRS 07: Stronger IPR enforcement would negatively impact public health
Michael F. Martin (Coordinator) [Analyst in Asian Political Economy Foreign Affairs, Defense, and Trade Division] K. Alan Kronstadt
[Specialist in South Asian Affairs Foreign Affairs, Defense, and Trade Division] “India-U.S. Economic and Trade Relations” August 31, 2007
CONGRESSIONAL RESEARCH SERVICE Order Code RL34161 [EG] <accessed 12/15/08>
“Opponents of inserting “data exclusivity”146 clauses into Indian law assert that they constrict India’s generic drug
industry’s ability to compete both domestically and internationally, and place a large financial burden on firms
that must repeat expensive clinical trials. By removing the availability of inexpensive and oftentimes life-saving
medications, the argument goes, would have a seriously detrimental resulting impact on public health.”
Page 50 of 75
D. Implication: Human Rights
UN Econ & Social Council 01 – AIDs significantly decreases the enjoyment of HRs
The High Commissioner for Human Rights “Report of the High Commissioner on the Impact of the Agreement on Trade-Related Aspects
of Intellectual Property Rights on Human Rights” (June 27, 2001) UNITED NATIONS ECONOMIC AND SOCIAL COUNCIL 10-15, 27-58, U.N.
Doc. E/CN.4/Sub.2/2001/13 <accessed June 24, 2010> (EG)
“The HIV/AIDS pandemic has a significant impact on the enjoyment of human rights. Not only does it concern the
enjoyment of the right to health, it is also a significant obstacle to the realization of the right to development.
Looking at the health dimension: in 1999, 5.4 million people were newly infected with HIV, 34.3 million people
were living with HIV/AIDS throughout the world and 2.8 million people had died from the virus. A recent report of UNAIDS
illustrates the developmental dimensions of HIV/AIDS. For example, surveys note that households caring for a family member with AIDS
suffer dramatic decreases of income. In education, HIV is taking its toll, first by eroding the supply of teachers who fall ill as a result of the virus, second,
by health treatment eating into family education budgets, third, by adding to the pool of children who are growing up without parental support which may affect their
ability to stay at school. In the agricultural sector, sickness of farm workers has resulted in a fall in agricultural output and might threaten food security. HIV is hurting
business through absenteeism, lower productivity, and higher overtime costs for workers obliged to work longer hours to replace sick colleagues.61 Indeed, the
effects of HIV on the enjoyment of the right to development are so strong that the Secretary-General in his
address to the African Summit described HIV/AIDS as “our biggest development challenge”. 62”
Page 51 of 75
AT: Pharmaceutical Innovation
UN Econ & Social Council 01 – “unprofitable diseases” are under-researched because of the economic incentive
The High Commissioner for Human Rights “Report of the High Commissioner on the Impact of the Agreement on Trade-Related Aspects
of Intellectual Property Rights on Human Rights” (June 27, 2001) UNITED NATIONS ECONOMIC AND SOCIAL COUNCIL 10-15, 27-58, U.N.
Doc. E/CN.4/Sub.2/2001/13 <accessed June 24, 2010> (EG)
“As IPRs are limited commercial rights, they are essentially driven towards economic reward; the objective of promoting
respect for human rights would at best appear to be secondary consideration. Two issues arise. First, as WHO has noted, the commercial motivation of
IPRs means that research is directed, first and foremost, towards “profitable” disease. Diseases that
predominantly affect people in poorer countries - in particular tuberculosis and malaria - still remain relatively
under-researched.44 The fact that patents create opportunities for economic reward that are optimized when
market conditions are right logically leads researchers away from “unprofitable” diseases to diseases that affect
people in markets where the return is likely to be greater. According to WHO, “questions remain as to whether the patent system will ensure
investment for medicines needed by the poor. Of the 1,223 new chemical entities developed between 1975 and 1996, only 11 were for the treatment of tropical
disease”.45”
Page 52 of 75
AT: Exemptions
Globalization and Health 07 – TRIPS flexibilities cannot be utilized by many
Greg Martin [Science and Research Department, World Cancer Research Fund] Corinna Sorenson [London School of Economics] and
Thomas Faunce [College of Law, Medical School, Globalization and Health Project – Centre for Governance of Knowledge and
Development, Australian National University, Australia] “Balancing intellectual monopoly privileges and the need for essential
medicines” Globalization and Health, Vol. 3, No. 4, (June 12, 2007) <accessed May 30, 2010> [EG] http://ssrn.com/abstract=1408836
“Despite the flexibilities granted by the TRIPS agreement, few developing countries have employed them to
develop policies to protect public health. Consequently, organizations such as Medecins Sans Frontieres and Oxfam argue that the provisions have
had minimal impact on improving access to affordable medicines for the world's poor. Effective implementation of such provisions, most
notably compulsory licensing, has been adversely affected by several factors. First, the implementation of
compulsory licensing is complex and requires a sufficient local administrative infrastructure, which is often
prohibitively expensive, with costs in excess of US$1.5 million. Second, the flexibilities provided by the TRIPS agreement
have been limited by a number of recent developments, such as bilateral and regional free trade agreements. Free trade agreements,
negotiated by the USTR industrialised countries (e.g., Australia and South Korea), [that] require commitments beyond those specified by
TRIPS. Such provisions include 1) extending patent terms beyond 20 years for delayed marketing approval, 2)
limiting parallel imports of patented drugs, restricting grounds for compulsory licensing, 3) imposing 'data exclusivity' rules, 4) defining
'innovation' to include minor 'me-too' molecular variations, 5) facilitating elimination of reference pricing, and 6) introducing the pro-
evergreening 'linkage' of safety and quality regulatory assessments of proposed new generic market entrants with patent checks.”
Page 53 of 75
AT: Compulsory Licensing
Ian Fergusson 03 – There is no guarantee the drug will be manufactured due to low economic incentives and
restrictions
Ian F. Fergusson [Analyst in International Trade and Finance Foreign Affairs, Defense, and Trade Division] “The WTO, Intellectual
Property Rights, and the Access to Medicines Controversy” Order Code RS21609 November 5, 2003 www.opencrs.com <accessed May
30, 2010> (EG)
“There also may be little economic incentive for a supplier to manufacture the product in the case of an LDC
issuing a compulsory license. Under the system contemplated by the Decision of August 30, 2003, a developing country with no
manufacturing capability may use a compulsory license to obtain a product for a generic manufacturer in another
country. However, the generic manufacturer in the second country may have no economic incentive to do so, especially in limited quantities to poor countries. In
addition, under many of the proposals the product would have to use special packaging or distinctive shapes to avoid
diversion. Under such restrictions, it is not certain that a generic producer would undertake the development and
formulation costs for such a limited market.15 Thus, even though a compulsory license was issued, the drugs may
never be manufactured. According to some NGOs and AIDS activists, this is precisely the result being sought. One activist claimed that restrictions
advocated by the U.S. create “a watertight system so that no generic drugs ever get through to the patients in
developing countries who desperately need them.”16”
Vanderbilt J. Enter. & Tech. L. 08 – The WTO discourages the use of compulsory licenses
Sara Beth Myers [J.D. Candidate, Vanderbilt University Law School, 2009; M.A., Yale University, 2005; B.A., Duke University, 2003] “A
Healthy Solution for Patients and Patents: How India’s Legal Victory Against a Pharmaceutical Giant Reconciles Human Rights with
Intellectual Property Rights” VANDERBILT JOURNAL OF ENTERTAINMENT AND TECHNOLOGY LAW Vol. 10 No. 3, pp. 763-798 (2008)
<accessed May 30, 2010> [EG]
“Novartis was adamant in asserting that its case against India was not about compulsory licenses, 181 yet the
company would have been in a much stronger legal position if India had granted a patent for Glivec and then
attempted to issue a compulsory license for the drug. Knowing this, Novartis made it clear that it “fully supports flexibilities in the TRIPS
agreement that allow governments to make exceptions to patent rights and import pharmaceuticals produced under compulsory license in case of a national emergency
or a lack of supply from the patent-holder.”182 Although
the WTO recognizes the need for compulsory licenses in order to
combat threats to global health such as HIV/AIDS and the avian flu, it still discourages the extended use of such
licenses.183”
Page 54 of 75
Disadvantage 3: Food Sovereignty
A. Link: GMOs are Patented
Hastings International and Comparative Law Review 06 – IPR rights on GE crops have raised concerns of
farmers and NGO’s
Peter Straub [LL.M., Between 1997 and 1999 he studied Law at the Philipps-University of Marburg, Germany, where he passed the First
State Examination in Law. In 2002 he passed the Second State Examination in Law. Between 2002 and 2004 he worked for different law
firms in Singapore and China. From 2004 to 2005 he studied at the National University of Singapore, where he graduated as Master of
Laws with a specialization in International and Comparative Law. He currently practices as an attorney-at-law in Hanover, Germany],
“Farmers in the IP Wrench - How Patents on Gene-modified Crops Violate the Right to Food in Developing Countries,” Hastings
International and Comparative Law Review, Winter, 2006, (29 Hastings Int'l & Comp. L. Rev. 187) (PV)
“A major goal of the United States during the TRIPS negotiations was to obtain intellectual property protection
for its agricultural biotechnology industry. In North America, and around the world, the economic effects
n1
of strengthened intellectual property rights on genetically engineered (GE) crop plant varieties have raised
concerns of farmers and non-government organizations. Unfortunately, they seldom argue within the framework of internationally
recognized human rights. Instead, they make reference to rather fuzzy values, such as "food sovereignty.””
Page 55 of 75
B. Link: Farmers put out of business
Hastings International and Comparative Law Review 06 – Because of GE crop patents, it may become
impossible for farmers to find seed they can use without infringing on IPRs
farmers who do not grow GE crops themselves are still affected when their neighbors grow such
“As noted above,
crops. In developing countries, farmers are highly dependent on saving seeds or on cultivating wild varieties. When transgenic contamination of
seed stock and wild varieties occurs, as has already happened, it might become impossible for farmers to find seed that
they can still use without infringing intellectual property rights. Small and peasant farmers in developing
countries are in even less of a position to pay license fees or legal expenses in defense of their rights than their
counterparts in developed countries. As a result, they could be forced to abandon farming which would further
limit the local availability of food.”
Hastings International and Comparative Law Review 06 – Farmers in the US have been driven out because of a
‘violation’ of GE crops, even though it was in situations completely beyond their control
“For example, in the case of Monsanto Canada v. Schmeiser, n21 the Supreme Court of Canada ruled that a farmer had
infringed a patent under the Canadian Patent Act even though he had admittedly never bought or used GE seed
from Monsanto. n22 Canola plants containing a patented gene for herbicide resistance were found on the defendant's fields. These plants were indistinguishable
from other non-GE canola unless sprayed with one of Monsanto's herbicides. It remained unclear how the GE seeds had arrived on the
defendant's fields, as the defendant only saved and developed his own seeds. The defendant claimed they must
have been blown onto his fields thereby contaminating his own crops. As a result of legal costs and court
injunctions that permanently forbid farmers to sell Monsanto's products, many farmers in the United States have
been driven out of business by Monsanto's lawsuits.”
Hastings International and Comparative Law Review 06 – Small farmers in developing countries will be unable
to take precautions against ‘violating’ the IPRs of GE crops
“It can be expected that in developing countries, where the wild ancestors of crop plants can still be found, manipulated
DNA from GE varieties will contaminate other crop varieties, especially "landraces." n32 The term "landraces" is used to describe plants that
are selected by traditional farmers from wild populations. n33 Due to illiteracy and the lack of information, small farmers in
developing countries will be unable to take precautions against the contamination of these other varieties. n34 In
2001 it was discovered that landraces of maize in Mexico had already been contaminated by transgenic DNA
from GE maize varieties from the United States even though a national moratorium against GE crops had been in
place since 1998.”
Page 56 of 75
Hastings International and Comparative Law Review 06 – Because of IPR laws, small farmers in developing
countries might soon find themselves in a situation similar to that currently experience by US farmers
“The governments of developing countries find themselves under pressure from the United States and other
developed countries to join international (TRIPS) and bilateral (TRIPS plus) agreements on the protection of
intellectual property. These agreements would obligate them to modify their domestic IP laws and to protect
foreign intellectual property according to Western standards. As a result, traditional small-hold farmers in
developing countries might soon find themselves in a situation similar to that currently faced by farmers in North
America.”
Hastings International and Comparative Law Review 06 – GE crops undermine farmers self-reliance
“Sustainability has different aspects. Environmental sustainability, for example, requires a judicious use of natural
resources to guarantee the stability of food supply for the future. n43 Economic and social sustainability are
meant to guarantee food supply in times of recession or other economic crises through effective markets and
public policies. n44 Opponents of agricultural gene-engineering have argued that GE crops threaten the
sustainability of food access in various ways. One main criticism is that such crops undermine farmers' self-
reliance by making them dependent on the TNCs that market GE crops.”
Thai Indian News 08: The spread of GM food is harming farmers b/c of IPR
Thai Indian News “Farmers protest over genetically modified crops in Delhi” May 6th, 2008 [EG] <accessed February 25, 2009>
http://www.thaindian.com/newsportal/south-asia/farmers-protest-over-genetically-modified-crops-in-delhi_10045775.html
Farmers from different parts of the country on Tuesday demonstrated at the Jantar Mantar on Parliament
“New Delhi, May 6 (ANI):
street over
the use of genetically modified crops in the country. Organised by Coalition for a GM-free India, the protesting farmers
demanded that the genetically modified technology should be banned in the country, as it was against the Indian
farmers interest. Protestors said that with the spread of genetically modified (GM) crops, farmers rights could be
seized in the name of the Intellectual Property Rights and patents.”
Page 57 of 75
C. Impact: Food Sovereignty
1. Food Sovereignty Violated
David Kaplan 04 – WTO trade policies violate food security and human rights
David M. Kaplan [Ph.D. and Assistant Professor of Philosophy at Polytechnic University, Brooklyn; He is the editor of readings in the
Philosophy of Technology and co-editor of Society, Ethics, and Technology (Wadsworth, 2005). Recently, he has turned his attention to
the moral and political dimensions of of technologically modified food and enhancement technologies.] “What’s Wrong with Genetically
Modified Food?” in Frederick Adams, ed. Ethical Issues of the 21st Century ((Charlottesville: Philosophy Documentation Center Press,
2004) “What’s Wrong with Genetically Modified Food?” http://www.csid.unt.edu/files/What's%20Wrong%20With%20Genetically
%20Modified%20Food.pdf <accessed May 30, 2010> [EG]
“Now, instead of entering the thickets of scientific debates, we can make a stronger argument on principle: GM
food production, distribution, and consumption, driven by market imperatives, backed by institutional power,
violates our human rights. Specifically, the trade policies enforced by the WTO that requires nations to purchase
GM food, privatize public farms, and transform agricultural production from subsistence to export violates the
internationally recognized right to food security.”
David Kaplan 04 – TRIPs undermines food security

“There is growing consensus among Non-Governmental Agencies (NGOs) that the WTO agreement on Trade
Related Aspects of Intellectual Property (TRIPs) unfairly benefits agri-business at the expense of developing
nations.
Among other things, TRIPs requires that food and medicine that was once under the public domain must now be privatized through
global patent law. This allows food manufacturers to modify traditionally-bred seeds, patent them, and then sell them back to people
who had always used them for free. The patenting of GM seeds will deepen the plight of farmers around the world who are already
struggling. If a farmer switches to a genetically engineered seed, that farmer has to sign a gene licensing agreement, which specifies
royalty fees and dictates the seed, fertilizer, and chemicals to be used.3 In the U.S it is now illegal for farmers to save patented seeds
without paying licensing fees; in India a bio-tech firm patented a version of basmati rice and is attempting to make farmers pay for
essentially the same seeds they had formerly used for centuries. 97% of the agricultural patents are owned by five bio-tech
corporations: Monsanto, AstraZeneca, Novartis, DuPont/Pioneer, and Avantis.4 TRIPs also covers microorganisms such as cell lines,
genes, and plant varieties, many of which are used for medicine. It allows for the private sector to own the diversity of nature itself.
The United Nations Development Program (UNDP) criticized the TRIPs agreement in its 1999 Human
Development Report as “undermining food security and public health in developing nations.” 5 The UNDP reports
that TRIPs rules make it much more costly for poor and developing countries to procure seeds for crops and to
make medicine more accessible to the public.”
Page 58 of 75
David Kaplan 04 – GM foods exacerbates hunger because if IPRs
“The right to be free from hunger means that the state, minimally, has the obligation to prevent people from
starving. But it also implies the right of citizens to access food. The negative obligation of the state is to refrain from interfering with the enjoyment of that right by its
citizens; the positive obligation of the state is to take action to protect citizens when that right is violated by others. The state must protect citizens from
hunger and enable citizen to have the physical and economic access to adequate food and clean drinking water.
By adequate food means adequate in quality and quantity to allow for a healthy life that is also culturally acceptable – so long as its enjoyment does not infringe upon the
rights of others and it acquired in a way that is environmentally and socially sustainable. The state is rarely obligated to feed people, unless there is exists a specific
constitutional provision. Rather the obligation is to refrain from interfering in the efforts of citizens to provide for themselves, to protect our rights against other
individuals and groups, and to create opportunities and enable people to secure and maintain their right to food. The state is obligated to respect, protect, and promote
Unfortunately,
rights related to food, water, and nutrition – all of which are necessary conditions for our enjoyment of our basic political and entitlement rights.
the TRIPs agreement is likely to threaten food security increasing both the number of people who live in hunger
and poverty. WTO policy not only requires nations to buy GM seeds, but it also requires that they change the nature of farming from small farms that produce food
for local people to eat, to large farms that grow export crops like coffee, sugar, cotton, fruits, and flowers. These large farms replace human labor with machinery thereby
displacing millions of people every year while eradicating societies based on rural farming, where one half of the world’s population still lives and works. As farming
communities dwindle in the face of competition, people are driven off their land and into poverty, usually settling in urban centers. Hunger actually increases as farm size
Even if GM foods could produce more abundant crops they would do little to solve hunger. The issue is
increases.9
poverty and poor governance, not lack of food. By turning food into intellectual property, biotech is likely to
exacerbate hunger by increasing dependence on the corporate sector for seeds and materials.”
Hastings International and Comparative Law Review 06 – small farmers are very important in developing
countries as they are usually the primary produces of staple food
“These small-hold farmers are very important for sustainable access to food in these countries as they are usually
the primary producers of staple food. Their production contributes to the local availability of food and helps shield the
n50
population from price spikes on regional and world markets. In many developing countries, the small-hold farming sector is, for a
majority of the population, also the only possibility of earning a livelihood. n51 Small-hold farmers are usually self-reliant in their food
production, and play important roles in the local food supply. Through the cultivation of landraces and seed exchange with
other farmers, they create new varieties that are especially adjusted to the climatic conditions of the particular
region. n52 The cultivation of such indigenous varieties is a further safeguard for food security. The use of GE
seed would compromise all of these important functions.”
Page 59 of 75
2. Food Sovereignty is a Human Right
David Kaplan 04 – Food security is a basic human right
“The right to food is a basic human right and an integral part of international human rights law. The right to food
is recognized directly or indirectly by every country in the world (either written into their constitutions or by virtue of their membership in
the United Nations). Article 25 of the 1948 Universal Declaration of Human Rights states that “everyone has the right to
a standard of living adequate for the health and well-being of himself and of his family, including food , clothing,
housing, medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of
The United Nations again affirmed the right to food security in the 1996 World
livelihood in circumstances beyond his control.”6
Food Summit. The U.N considered it “intolerable that more than 800 million people throughout the world, and
particularly in developing countries, do not have enough food to meet their basic nutritional needs.”
Page 60 of 75
Disadvantage 4: Innovation
A. Link: Innovation Destroyed
Dr. Natalia Karpova 00 – Historically, patent legislation decreases innovation is Russia
Dr. Natalia N. Karpova [Professor of the Academy of National Economy at the Russian Government] “LEGAL PROTECTION AND
COMMERCIALISATION OF INTELLECTUAL PROPERTY IN RUSSIA” 2000 Paper for Panel 2 <accessed July 12, 2010>
http://www.unece.org/operact/enterp/documents/panel2.pdf (EG)
“A reduction of inventive activity was observed after implementation of the Patent Law of the Russian Federation
in 1992. There has been a sharp drop in the number of invention applications submitted by Russian applicants
(from 200 000 in 1989 up to 28 000 in 1993).”
Michele Boldrin & David Levin 08: An absence of patent protection could increase innovation in the software
industry by 15%
Michele Boldrin PhD [Professor of economics; fellow of the Econometric Society; research associate of the Center for Economic Policy
Research in London and for FEDEA in Madrid.] David K. Levine PhD [John H. Biggs Distinguished Professor of Economics at Washington
University in St. Louis; President of the Society for Economic Dyamics; fellow of the Econometric Society; research associate of the
NBER; member of the Sloan Research Fellowship Program Committee;co-editor of NAJ Economics] “Against Intellectual Monopoly”
January 2, 2008 [EG] <accessed 19/01/09> http://www.dklevine.com/papers/imbookfinalall.pdf
“Notice, in particular, that patenting is found to be a substitute for R&D, leading to a reduction of innovation. In
the authors’ calculation, innovative activity in the software industry would have been about 15% higher in the
absence of patent protection for new software.”
Michele Boldrin & David Levin 08: Intellectual monopoly decreases economic freedom
“What we have argued so far may not sound altogether incredible to the alert observer of the economics of innovation. Theory aside, what have we shown, after all? That
thriving innovation has been and still is commonplace in the absence of intellectual monopoly and that intellectual
monopoly leads to substantial and well-documented reductions in economic freedom and general prosperity.”
Michele Boldrin & David Levin 08: Switzerland benefited from not having patents
“Mid-nineteenth century Switzerland [a country without patents], for example, had the second highest number
of exhibits per capita among all countries that visited the Crystal Palace Exhibition. Moreover, exhibits from
countries without patent laws received disproportionate shares of medals for outstanding innovations. 7”
Michele Boldrin & David Levin 08: IPR is unnecessary and bad ;)
“...most innovations have taken place without the benefit of intellectual monopoly. Indeed, the system of
intellectual monopoly as it exists today is of recent vintage – some parts of the current system are only a few
years old and their damaging effects are already visible and dramatic.”
Page 61 of 75
Michele Boldrin & David Levin 08: IPR is harm and no good
“Intellectual monopoly is not a cause of innovation, but it is rather an unwelcome consequence of it. In a young
dynamic industry full of ideas and creativity, intellectual monopoly does not play a useful role. It is when ideas
run out and new competitors come in with fresher ideas, that those bereft of them turn to government
intervention – and intellectual “property”– to protect their lucrative old ways of doing business.”
Michele Boldrin & David Levin 08: Patent protection is unneeded and undesirable
“...there is little need to strengthen patent protection since alternative appropriation methods are available and
widely preferred. Instead, stronger patent protection could be leading to undesirable ‘second-order’ effects such
as the use of patents to block competitors.14”
Michele Boldrin & David Levin 08: Low IPR protection increases the quality of innovation
“...lowering intellectual property protection decreases the monopoly distortions for all consumers of the “good”
ideas. With a larger market, many more consumers benefit from the greater usefulness and availability of all
these “good” ideas. Second, lowering intellectual property protection makes it harder for “marginal” ideas to
make it into the market.”
Michele Boldrin & David Levin 08: Patents don’t increase but stifle innovation
“In fact the evidence shows that the invention of marvelous machines, drugs and ideas does not require the spur
of patents. If anything, the evidence shows, it is the other way around: patents protection is not the source of
innovation, but rather the unwelcome consequence that, eventually, tames it.”
Michele Boldrin & David Levin 08: Patents would have stifled software innovation (prior to 1981)
“Each and every one of these key innovations occurred prior to 1981 and so occurred without the benefit of
patent protection. Not only that, had all these bits and pieces of computer programs been patented, as they
certainly would have in the current regime, far from being enhanced, progress in the software industry would
never have taken place. According to Bill Gates – hardly your radical communist or utopist – “If people had understood how
patents would be granted when most of today's ideas were invented, and had taken out patents, the industry
would be at a complete standstill today.” 2”
Page 62 of 75
B. Impact 1: Injustice
Boldrin & Levine 08 – Intellectual monopoly gives all the rewards to an often undeserving person, damages
society and is unfair
“The moral of these – and dozens of other stories: calculus, clipper sailboat, bicycles, motion pictures, MRI imaging, automobiles, duct tape … – is simple. Most great
inventions are cumulative and simultaneous; most great inventions could have been introduced simultaneously, or almost so, by many different inventors and companies,
competing among them to improve the product and to sell it to consumers at a price as low as possible; most great inventions could have spread more rapidly and
improved more quickly if the social productive capacity that simultaneous inventions generate had been usable; all of us, but a dozen undeserving monopolists, would
have been better off. None of this has happened, and none of this is happening, because the system of intellectual monopoly blocks it. Intellectual
monopoly
has historically given and still gives all the rewards to a lucky and often undeserving person who manages, in one
way or other, to get the patent and grab the monopoly power. As the stories we have told show, this is absolutely not necessary
for great inventions to take place. It is damaging for society, as valuable productive capacity is literally destroyed
and thrown away. Finally, if you allow us, it is also awfully unfair.”
Page 63 of 75
C. Impact 2: Life Saving Research Hindered
Boldrin & Levine 08 – Research & Development into cancer is hindered because of patent protection
“It could be, and sometimes is, argued that the modern pharmaceutical industry is substantially different from the chemical industry of the last century. In particular, it is
it would seem
argued that the most significant cost of developing new drugs lies in testing numerous compounds to see which ones work. Insofar as this is true,
that the development of new drugs is not so dependent on the usage and knowledge of old drugs. However, this
is not the case according to the chief scientific officer at Bristol Myers Squib, Peter Ringrose, who ‘told The New
York Times that there were ‘more than 50 proteins possibly involved in cancer that the company was not working
on because the patent holders either would not allow it or were demanding unreasonable royalties.’”
Boldrin & Levine 08 – Patents do not have a helpful role in pharmaceutical innovation
patents do not play a helpful role in pharmaceutical innovation. Far from encouraging great
“That said, we have seen that
new health and life-saving products, the system instead produces too much innovation and expense of the wrong
kind – “me-too” drugs to get around others’ patents and get a share of a lucrative monopoly, and all the
advertising and marketing expenses attendant upon monopoly power.45 In the play that is life, health is the
ultimate commodity – we all want to live longer and stay healthier. As we have just seen, patents do not have a useful
role in this play.”
Page 64 of 75
D. Refutation: Historical Precedent  Italy
Boldrin & Levine 08 – The growth of India’s industry is similar to Italy’s before patent protection
“Since 1978, India has taken over as the primary center of pharmaceutical production without patent protection.
The growth and vitality of the Indian industry is similar to that of the pre-1978 industry in Italy. In fact much more
so, as the sheer size of the national market has turned Indian generic drug producers into big players in the global
pharmaceutical industry.”
Boldrin & Levine 08 – Italy had a thriving pharmaceutical industry without patents; No innovation has
improved since Italy’s adoption of patents; if anything, patents hurt Italy instead of helping
“In other words, a thriving pharmaceutical industry had existed in Italy for more than a century, in the complete
absence of patents. That is point one. Point two is that neither the size, nor the innovative output, nor the
economic performances of that industry have improved, to any measurable extent, during the thirty years since
patents were adopted. Every indicator one can look at suggests that, if anything, the Italian pharmaceutical
industry was hurt, not helped, by the adoption of patents, and every expert that has looked the matter has
reached this same conclusion.”
Boldrin & Levine 08 – Italy did not achieve any significant increase in the discovery of innovative drugs after it
enacted patent protection laws
“During the period 1961-1980 a total of 1282 new active chemical compounds was discovered around the world.
Of these, a total of 119 came from Italy (9.28%). During the period 1980-1983 a total of 108 compounds were
discovered. Of these, 8 came from Italy (7.5%).20 While we do not have data covering the most recent decades,
the very clear impression of the informed observer is that innovations have decreased. Professors Scherer and
Weisburst, in fact, took pains to carefully study the evolution of the Italian pharmaceutical industry after the
adoption of patents. Here is the summary verdict, in Scherer’s own words ‘Research by Sandy Weisburst and mentored by me showed, for example, that Italy, with a
vibrant generic drug industry, did not achieve any significant increase in the discovery of innovative drugs during
the first decade after the Italian Supreme Court mandated the issue of pharmaceutical product patents.’”
Page 65 of 75
Boldrin & Levine 08 – Without patent protection, Italy was the fifth world producers or pharmaceuticals and
the seventh exporter
“In Italy, pharmaceutical patents were prohibited until 1978, when the Supreme Court ruled in favor of eighteen
pharmaceutical companies, all foreign, requesting the enforcement of foreign patents on medical products in
Italy. Despite this complete lack of any patent protection, Italy had developed a strong pharmaceutical industry:
by the end of the 1970s it was the fifth world producer of pharmaceuticals and the seventh exporter.”
Boldrin & Levine 08 – If patent protection was a requirement for pharmaceutical innovation, history should tell
a diametrically different tale than it does
if patents were a necessary
“You may wonder why we are offering all these details about specific countries, patenting of chemical processes, and pharmaceutical products. For a very simple reason:
requirement for pharmaceutical innovation as claimed by their supporters, the large historical and cross country
variations in the patent protection of medical products should have had a dramatic impact on national
pharmaceutical industries. In particular, at least between 1850 and 1980, most drugs and medical products
should have been invented and produced in the United States and the United Kingdom, and very little if anything
in continental Europe. Further, countries such as Italy, Switzerland and, to a lesser extent, Germany, should have
been the laggards of the pharmaceutical industry until recently. Instead the opposite was true for longer than a
century.”
Page 66 of 75
E. Refutation: Historical Precedent  Silicon Valley
Boldrin & Levine 08 – Silicon Valley grew by leaps and bounds when they were free of intellectual
monopolization
Silicon Valley – freed
“While Route 128 companies spent resources to keep knowledge secret – inhibiting and preventing the growth of the high tech industry – in California this was not possible. And so,
of the millstone of monopolization – grew by leaps and bounds as employees left to start new firms, rejoined old
firms and generally spread socially useful knowledge far and wide.”
Page 67 of 75
Disadvantage 5: Freedom of Information Violated
A) Internal Link: Indigenous Rights Implicated
Intl Ctr for HRs & Dem Dev 09 – Policies designed to protect privileges of indigenous peoples or minorities may
conflict with investment treaty protections; exception clauses are rare
Luke Eric Peterson [International investment arbitration reporter and consultant and has reported on investor-state arbitration for The
Financial Times, The Economist and The American Lawyer; Affiliate, Investment Law Project, NYU Law School.] “Human Rights and
Bilateral Investment Treaties: Mapping the role of human rights law within investor-state arbitration” (2009) INTERNATIONAL CENTRE
FOR HUMAN RIGHTS AND DEMOCRATIC DEVELOPMENT <accessed August 31, 2010> http://www.dd-
rd.ca/site/_PDF/publications/globalization/HIRA-volume3-ENG.pdf (EG)
“Often governments may introduce policy measures or preferences which are designed to boost the prospects of
certain marginalized or disadvantaged persons or groups whether they be indigenous persons, ethnic minorities
(or majorities), women, or others. On the face of it, such policies could come into friction with investment treaty protections
accorded to foreign investors, particularly where certain duties or obligations are to be borne by foreign investors
or foreign-owned companies, or where certain benefits or preferences are denied to foreign investors. Nonetheless, it
is unusual for governments to make reservations or exceptions to investment treaty protections in this context.
On rare occasions, some treaties include exceptions to ensure that positive discrimination measures taken in
favor of designated groups cannot be challenged by foreign investors as a violation of the investment treaty guarantees of
nondiscrimination (or national treatment).130 In other words, where special programs or policies are put in place to provide benefits or preferences to a targeted group
or minority, a foreign investor would not be able to invoke his own entitlement to “national treatment” in an effort to obtain the same preferences or benefits meted out
to these groups. However, such exception clauses do not appear in all treaties.”
Intl Ctr for HRs & Dem Dev 09 – General excpetion clauses are exceedingly rare (New Zealand-Thailand ex.)
rd.ca/site/_PDF/publications/globalization/HIRA-volume3-ENG.pdf (EG) [Emphasis in Original]
“It is exceedingly rare for a government to insert a general exception into an investment agreement so that none
of the investment protection provisions may be invoked in an effort to challenge special preferences or policies
for historically disadvantaged groups. Notably, the New Zealand Government in an agreement with Thailand includes such a
sweeping general exception, thus making clear that none of the investor protections will override the government’s capacity to accord
special or more favorable treatment to the indigenous Maori people. 131”
Page 68 of 75
B) Internal Link: Economic Reforms Implicated
Intl Ctr for HRs & Dem Dev 09 – BITs complicate land redistribution or reform activities
“While clearly allowing expropriation of foreign-owned land, the compensation standards provided under these
BITs may complicate the efforts of developing country governments that are contemplating land redistribution
policies. As the next section makes clear, there are a number of live legal cases where foreign investors are objecting to land
reform activities. The factual circumstances of such disputes can differ widely— with some governments
appearing to follow carefully-prescribed legal procedures and safeguards, while others appear to make capricious
land-grabs. One major recurring issue in these disputes will be the actual amount or level of compensation owing
for breach of BITs in cases of land reform.”
Intl Ctr for HRs & Dem Dev 09 – European investors challenging South African policies to eradicate the effects
of apartheid
“Such matters are not of mere hypothetical interest. For years, controversy has swirled around the Black
Economic Empowerment (BEE) policies being developed by the South African Government in an effort to
ameliorate the lingering effects of the Apartheid system.132 BEE policies include a range of measures targeted at Historically Disadvantaged
South Africans (HDSAs), including employment equity schemes, preferential access to government contracts and licenses, and divestment policies which oblige businesses
to sell shareholdings to HDSA partners. While well-intended, the policies have attracted criticism both from those who say that the policies impose too great a burden on
business, as well as those who complain that the BEE policies benefit only a layer of well-connected wealthier HDSAs.133 In response to such criticisms, the South African
Government has adapted its BEE policies over time—both as an effort to water down proposals for larger scale share divestments, as well as to ensure that the benefits of
such policies are “broad-based” and beneficial for poorer, disadvantaged persons. Some foreign businesses have responded warily to BEE, with the policies widely viewed
as having contributed to the deadlock of major trade negotiations between South Africa and the United States. Meanwhile, some countries with whom South Africa has
concluded economic agreements have expressed the view that the imposition of BEE measures on foreign enterprises may contravene South Africa’s international
economic commitments.134 Recently,
a group of European investors in the South African mining sector took the
unprecedented move of filing a legal claim against South Africa, alleging that various BEE requirements violate
the terms of investment protection treaties with Italy and Luxembourg. The investors own several South African mining companies,
and held various mining rights which were subject to a mandatory “conversion” process, whereby all South African mineral resources are to be brought under state
control and re-licensed to miners for fixed periods of time. As part of this conversion process, companies are assessed on their progress towards social, labour, and
development objectives, including the hiring of HDSA managers and provision of special programs and benefits for HDSA workers. In the view of the investors, these BEE-
inspired policies impose significant costs on company operations and amount to an “expropriation” of the companies’ preexisting mining rights, as well as “unfair” and
In their request for arbitration filed in 2006—which was
“inequitable” treatment, contrary to the terms of South Africa’s investment protection treaties.
still confidential at the time of this writing— the investors allege that they may suffer upwards of $350 million (US) in damages,
depending upon the final effects of the BEE mandates introduced by the South African Government. In 2007, an arbitration panel was
convened to hear the dispute, however progress to date has been slow; written arguments in the case will play out over 2008 and 2009, with hearings expected to be held
At this stage, any legal arguments tabled in the case remain confidential. However, already, it is clear
later in 2009.
that human rights policies are implicated in the dispute.”
Page 69 of 75
C) Internal Link: Right to Water Implicated
Intl Ctr for HRs & Dem Dev 09 – A government’s human rights obligations may conflict with BITs
“One of the most visible circumstances where a government’s human rights obligations to those living within its
territory may come into the frame of investment treaty arbitrations is in relation to foreign investments in the
water and sanitation sector. Over the last decade, there have been at least a dozen BIT arbitrations brought
against governments in relation to disputes in this sector.59 Ten of these cases have been brought against Argentina, whereas the remaining
two were brought against Bolivia and Tanzania respectively.60 Others may have been launched without publicity, given that there are no universal requirements for such
United Nations bodies have increasingly emphasized that a right to water can be inferred
lawsuits to be publicly disclosed.
from several of the rights in the International Covenant on Economic, Social and Cultural Rights, including the
right to the highest attainable standard of health, the right to housing, and the right to food; what’s more human
rights obligations related to water are explicitly referenced in several other human rights instruments , including the UN
Convention on the Rights of the Child, and the UN Convention on the Elimination of all forms of Discrimination against Women.61 At a minimum, states have obligations
to progressively realize economic and social rights to the maximum of their available resources. The Committee on Economic Social and Cultural Rights, in its General
Comment No.15—a non-binding, but authoritative interpretation of the ESCR—has set forth a number of steps which governments must pursue, including steps to ensure
that third parties entrusted with water delivery are not permitted to compromise “equal, affordable and physical access to sufficient, safe and acceptable water.”62 It has
long been conjectured that human rights might be at stake in certain of the disputes which gave rise to these investor-state arbitrations in the water sector.63 New
research conducted for Rights & Democracy finds clear evidence that human rights arguments have been raised by the respondent host-government in at least one of
these ongoing international arbitrations arising out of the Aguas Argentinas concession.64 As will be described below, the tabling of these human rights arguments in
the Aguas Argentinas case places the onus squarely upon the arbitration tribunal to address such arguments and to consider their relevance to the
legal dispute. Indeed, the tribunal hearing the dispute acknowledged at an early stage of the proceedings that the case “may raise a
variety of complex public and international law questions, including human rights considerations.” 65”
Intl Ctr for HRs & Dem Dev 09 – Argentina referenced the right to water in its BIT case against Aguas Argentinas
[Background Knowledge or Evidence]
“Argentina has insisted that its BIT obligations must not be interpreted in a vacuum divorced from the rest of
international law. In particular, Argentina stresses that the BIT “must be construed in a manner which does not
affect the fulfillment of other international obligations between the states signatory of such BITs.” 67 According to
Argentina, such an approach would ensure that BIT obligations would be read in light of other rules of
international law linking Argentina, the United Kingdom, France and Spain, including “any treaty on human rights
contemplating the human right to water”.68 Second, after arguing for the applicability of human rights law,
Argentina insists that its treatment of the claimants in the Aguas Argentinas arbitration was motivated by various
business failings on the part of Aguas Argentinas, coupled with an overriding obligation on Argentina’s part to
protect the population’s right to water.69 In Argentina’s view, these shortcomings by Aguas Argentinas compelled
the Argentine authorities to intercede so as to ensure that the right to water was not undermined by third
parties.70”
Page 70 of 75
D) Internal Link: Freedom of Assembly Implicated
Intl Ctr for HRs & Dem Dev 09 – Investment treaties can be interpreted to protect projects against non-violent
protests; a state human rights obligation
“States have various international human rights law obligations to protect the right of citizens to assemble
peacefully, express themselves, and to take part in non-violent protests. The International Covenant on Civil and Political Rights
contains such obligations, as do regional human rights conventions.93 Furthermore, under some circumstances, states may need to take certain “positive” or “proactive”
measures to ensure the effectiveness of such rights. For example, the European Court of Human Rights has held that governments have an obligation to provide a degree
of police protection at public protests which might be targeted by disruption or violence.94 These particular rights are especially germane in any discussion of foreign
Just as states have clear human rights obligations in
investment, as some FDI projects can be controversial and subject to opposition.
relation to freedom of expression and assembly, governments may undertake in their international investment
treaties to provide foreign investors and/ or investments with “full protection and security”. At a minimum, this
obligation requires that states provide a baseline of police protection for foreign-owned projects; this is not a strict
liability obligation, but it does mandate a certain level of due diligence on the part of the host country. For instance, in a 1990s-era FDI dispute between an American
corporation and (then) Zaire, the Government was found by arbitrators to have breached the “full protection and security” obligation because it had taken no steps
whatsoever to prevent the ransacking and looting of privately owned manufacturing facilities by the state’s armed forces. This legal obligation on states to exercise due
diligence in protecting foreign-owned investment also extends to the actions of non-state actors (e.g. citizens, other businesses, criminals, etc.)95 Further muddying the
picture,some investment treaty arbitrators have taken the view that the “protection and security” standard
includes not only the physical protection of foreign-owned investments, but also security from other forms of “harassment” which pose
no physical threat to assets or threat of violence.96 While a disputed interpretation, it is conceivable that activist
campaigns, even when unaccompanied by physical efforts to blockade or picket an investment, might be
construed as forms of “harassment”.97 It should also be stressed that host governments may take on even more extensive
physical protection and security obligations in individual contracts or host government agreements with a
particular foreign investor. For example, a host state may agree to provide 24-hour-a-day police protection for particular facilities, or commit particular
resources (such as helicopters, police vehicles, etc.), or pledge to prevent any “interferences” by outside actors with an investor’s operations.98 Such obligations
go beyond the standards found in international treaties, and are beyond the purview of this paper. However, they may impose more
stringent legal obligations—whose relationship with human rights will be even more friction-generating—even as such contract
obligations remain hidden from public view by virtue of being buried in confidential business arrangements
concluded with foreign investors.99”
Page 71 of 75
Intl Ctr for HRs & Dem Dev 09 – Treaties are typically silent on how to reconcile freedom of assembly and right
to security leaving room for governments to feel legally obligated to smooth the path for FDI projects
“At the best of times, governments may walk a tight-rope in balancing legitimate rights of protest, while offering
basic police protection to FDI projects. From a human rights perspective, great sensitivity is called for in such situations where protestors
are objecting to a foreign investor’s activities, as there is ample evidence of overzealous use of force by police and security forces in
relation to the protection of foreign investments in the developing world.100 Indeed, there is some anecdotal evidence to suggest
that governments feel under varying degrees of legal compulsion to smooth the path for FDI projects. For example,
the government of Guatemala has professed to being torn between its duties to provide security for a highly controversial foreign-owned gold and
silver mine in the country’s western region and the government’s obligations to uphold the rights of citizens and indigenous groups to assemble and
protest the mining operation. As has been widely reported in the mainstream news media, public opposition to the project ultimately tipped over into
violence as locals and security forces clashed over efforts by protestors to blockade roadways and impede further mining activity at the mining site.101
Media coverage of these events has alluded to the government’s feeling under legal duties to ensure that protests do not derail the investment in
question. In April of 2005, the Associated Press noted that “(t)he government said it had to honor the mining concession, or risk a huge lawsuit by the
and large however, investment protection treaties are typically silent on the obligations of states to
company.”102 By
respect human rights to expression and assembly much less the complex challenges inherent in balancing and
reconciling such human rights obligations with the policing and provision of security of FDI projects. For instance,
exactly what degree of disruption of business activities must be borne by foreign investors facing citizen protests? Protestors might blockade roadways
or facilities for a period of hours in order to conduct a protest march. Conversely, protest activities might shut down business activity for a period of
weeks or even months. Similarly, labour unrest could lead to losses or disruption on the part of foreign owned businesses, either through picketing, sit-
investment treaties offer no guidance to arbitrators as to how to reconcile —in concrete
ins or other activities. However,
circumstances—a state’shuman rights obligations and its security obligations to foreign investors. A review of known
investment treaty arbitration disputes finds that in several legal disputes, foreign investors have sued states and
alleged that citizen or worker protests lead to a breach of the host state’s “protection and security” obligations
towards the affected investor.”
Page 72 of 75
E) AT: Historical Precedent – Arbitrators Protect Rights
Intl Ctr for HRs & Dem Dev 09 – Arbitrators are under no obligation to adhere to precedent; no guarantee of
uniform approach
rd.ca/site/_PDF/publications/globalization/HIRA-volume3-ENG.pdf (EG) [Brackets Added]
“A review of known investment treaty arbitration disputes finds that in several legal disputes, foreign investors have sued states and alleged
that citizen or worker protests lead to a breach of the host state’s “protection and security” obligations towards the affected investor. The available record is silent in
these cases as to whether the states raised explicit human rights defenses, for example by referring to human rights law obligations. In each case, arbitrators ruled that
the alleged disruptions suffered by the investors did not rise to the level where the host state failed to provide for basic security and protection. In fact, as will be seen,
provide(s) some grounds for cautious optimism that the particular treaty obligation (full protection
these particular cases
and security) is of limited reach and that tribunals are also attentive to the delicate balancing acts faced by states
needing to protect foreign investment and the democratic rights of citizens. Still, it should be reiterated that
arbitrators are under no strict duty to follow the path set by earlier tribunals; as such there is no guarantee that
future tribunals will approach doctrinal questions in similar ways.”
Page 73 of 75
F) Brink: Investment Arbitration Non-Transparent
Intl Ctr for HRs & Dem Dev 09 – Investment treaty arbitration is not a transparent system
“Even where observers are convinced that important human rights issues may be implicated in the international
legal system which protects foreign direct investment, it is not always straightforward for such interested parties
to monitor—much less have a stake or influence in—this system. The procedures for resolving investment treaty
disputes do not provide for the same levels of transparency seen in other areas of international law, particularly
those in the human rights system. Even dedicated investigation and reporting will only bring a certain degree of
information to light. Some arbitrations remain confidential because the parties wish to keep it this way, or because they are
forbidden from speaking publicly about the cases.”
Intl Ctr for HRs & Dem Dev 09 – Treaties fail to mandate transparency and thus defects to traditional
confidentiality considerations
“There are two factors which accommodate this confidentiality. First, the treaties themselves rarely stipulate that
investor state arbitrations be open to public scrutiny. Although Canada and the United States have embraced a move towards openness in their
recent investment treaties, many other governments have not followed suit. Thus, it often falls to the given procedural rules that govern a given dispute—for example,
To a considerable degree, these
the World Bank’s ICSID rules or the United Nation’s ad-hoc UNCITRAL rules —to stipulate how open the proceedings shall be.
procedural rules have not been designed with transparency or openness in mind. Indeed, in the case of the
UNCITRAL [United Nations Commission on International Trade Law] rules, and the rules of certain Chambers of
Commerce, these rules were tailored to private commercial arbitration between two parties, where
confidentiality has long been a major consideration.”
Intl Ctr for HRs & Dem Dev 09 – Absent procedural reforms, resolution of investor-state disputes will happen in
the shadows
“Although the ICSID [International Centre for Settlement of Investment Disputes] system offers the greatest level
of transparency thanks to a public docket listing all cases being arbitrated at the Centre, ICSID proceedings are
themselves closed to the public unless both parties desire openness. What’s more, a move several years ago to bring
greater transparency to ICSID proceedings was watered down in the face of objections from many ICSID
stakeholders. To the extent that governments continue to negotiate investment treaties which draw upon
procedural rules that provide for scant levels of transparency, the resolution of investor-state disputes will
continue to take place (to varying degrees) in the shadows.”
Page 74 of 75
G) Impact: Human Rights Obligations Not Met
Intl Ctr for HRs & Dem Dev 09 – Information claims might be present to HRs fora to construe that non-
transparency violates a state’s HRs obligations (freedom of information)
it is easy to envision alleged human rights violations which might be raised by media
“As Margarete Stevens has suggested,
organizations, non-governmental organizations, or concerned citizens, in relation to the non-disclosure by a given
government of relevant information about foreign investor arbitrations mounted against that government. This
might take the form of requests made of governments for disclosure of any and all arbitrations (including those
whose existence is unknown to the public). Indeed, in the North American context there have been some uses of access-to-information laws in order
to access information about investor-state lawsuits whose existence was known, but whose details were confidential. In the Loewen v. United States case, a NAFTA
tribunal acknowledged that governments may have legal obligations to release documents related to arbitral proceedings. This acknowledgement came after the US
claims might be
Government approached the tribunal following a Freedom-of-Information request filed by US non-governmental organizations.141 Additionally,
presented to human rights fora, including regional human rights courts, in an effort to construe the lack of transparency
surrounding investor-state arbitration as a violation of a state’s human rights obligations.”
Page 75 of 75

Bilateral Investment Treaty Negative

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Bilateral Investment Treaty Negative

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Bilateral Investment Treaty FASD Elliot Grizzard & Preston Black

Negative Region IX Clark/Grizzard & Black/Thomas

Sarah Anderson 09 – Definition: Direct/Indirect Capital Controls [With Examples]

D) Alt Ev 3: Investor Knowledge & Appreciation

F) Response – Formal Law Ø Impact Commercial Affairs

K) AT: Not Russia Specific

L) AT: Not Current Crisis Specific

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David Kaplan 04 – TRIPs undermines food security

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