Columbia International Affairs Online: Policy Briefs

CIAO DATE: 01/2013

EU investment agreements and the search for a new balance: A paradigm shift from laissez-faireliberalism toward embedded liberalism?

Catharine Titi

January 2013

Columbia Center on Sustainable Investment


In July 2012, in an internal document, the European Commission’s Directorate-General for Trade suggested that future EU investment agreements (EUIAs) should incorporate regulatory flexibility in the same way in which EU free trade agreements (FTAs) safeguard parties’ policy space. Since it is expected that a number of treaties on the EU’s negotiating agenda will be concluded in the near future, and given the policy shift that has already taken place in Canada and the US,[1] it is time to start thinking about a new balance in a move away from investment treaties’ traditional laissez-faireliberalism toward WTO law’s embedded liberalism,[2] a model whereby liberalization is embedded within a wider framework that enables public regulation in the interest of domestic stability.