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BIT by BIT: Building a Foreign Investment Regime for the Americas
Paul Alexander Haslam
Post-Doctoral Fellow, Centre d’études interaméricaines
Université Laval, Canada
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This paper examines the consequences of the breakdown of talks on the Free Trade Area of the Americas
(FTAA) and the generalized shift from multilateralism to bilateralism in the Americas for the region’s
emerging foreign investment regime. The paper argues that multilateral processes have historically
benefited Latin American countries when their interests have diverged from those of the US. In terms of
investment, the foreign investment regime advanced by the United States (in bilateral investment treaties)
differs significantly from that advanced by sub-regional powers such as Argentina, Brazil and Mexico,
particularly regarding investment rules on national treatment and performance requirements. This suggests
that, in the absence of multilateral negotiations, US norms on investment and development will
progressively define the emerging hemispheric investment regime.
Keywords: bilateral investment treaties, United States, Latin America, investment policy, economic
development, multilateralism
With the abandonment of serious negotiations to complete the Free Trade Area of
the Americas (FTAA) as originally envisaged, in November 2003 at the Miami meeting
of trade ministers, and the stalemate of the Doha “development” round at Cancún in
September 2003, the regional and multilateral attempts to establish a hemispheric regime
to regulate foreign direct investment were left in tatters. These setbacks for regional
multilateralism in the Americas have been accompanied by a rise in the importance of
bilateralism, particularly in terms of the negotiation of free trade agreements (FTAs)
(Cosby 2004, 12; Mace 2004, 2). But this is also true in terms of investment; bilateral
investment treaties (BITs) and the investment chapters of bilateral FTAs, together with
the investment provisions of sub-regional preferential trading agreements, now constitute
the principal building blocks in the construction of the emerging foreign investment
regime in the Americas.
Convention