Amid massive reforms in foreign investment laws, Puig's work analyzes the options available to governments settling disputes
Sergio Puig, associate professor of law and director of the International Trade and Business Law program at University of Arizona Law, authored the lead article in the American Journal of International Law, Volume 112, Issue 3.
The article, “Imperfect Alternatives: Institutional Choice and the Reform of Investment Law,” (co-authored with University of California Irvine professor Gregory Shaffer) was also selected as the focus of the journal’s supplemental Unbound publication, which features short essays from scholars responding to the article.
International investment treaties and foreign investment laws are undergoing massive reform worldwide, and the article offers an in-depth analysis of the available alternatives that nations are considering for enforcing their provisions.
The article uses a novel methodology to evaluate these alternatives by applying comparative institutional analysis to the six main options available to governments. Puig and Shaffer examine what each option entails in terms of cost and benefits among three dimensions: peace, efficiency and fairness.
“Few areas of international law are as controversial and unsettling as foreign investment law,” Puig says. “Our goal with this work is to advance the necessary discussion that is already taking shape with various ongoing international negotiations.” He says the United States-Mexico-Canada Agreement, sometimes referred to as NAFTA 2.0, exemplifies this trend.
Based on the comparative analysis, Puig and Shaffer suggest that domestic judicial systems should play a larger role and that governments should be allowed the flexibility to choose among different options to settle disputes.
Doing so would “enhance the goals of peace, efficiency and fairness, while building better rule of law systems,” Puig says. “These systems of international justice should work as a complement to, instead of as a substitute for, domestic systems.” According to Puig, by “allowing governments to work with multiple options rather than the one-size-fits-all approach that comes with investment arbitration,” governments, investors and other stakeholders can be better off.
Puig also recently shared the main argument of this article as the keynote speaker for the Fifth Biennial Conference of the Latin American Society of International Law, held Sept. 24-25, 2018 at the School of Law of the Torcuato DiTella University in Buenos Aires, Argentina.