The Investment Chapter of the New Zealand–Korea Free-Trade Agreement: An Assessment of the Policy and Dispute Settlement Safeguards

This article discusses the obligations assumed by New Zealand under the 2015 free-trade agreement (FTA) with Korea, in the context of New Zealand's participation in an evolving investment treaty regime. It finds that, consistent with the trend towards greater liberalisation and protection of foreign investment in New Zealand's FTAs, the investment obligations under the agreement with Korea are generally more extensive than those assumed by New Zealand under its earlier agreements, but less extensive than the investment obligations in the more recent Trans-Pacific Partnership Agreement. The international regime for regulating foreign investment is undergoing a period of reflection, in view of sustained criticism of the nature of the protections it affords to foreign investors. The investment chapter in the FTA with Korea contains several safeguards which are intended to respond to such criticism, preserve policy space for governments, and improve perceptions of the legitimacy of the investment treaty arbitration process. The effectiveness of some safeguards is open to question. The article also questions whether the role of domestic courts is sufficiently recognised.