1. New Players and Old Rules: A Critique of the China-Ethiopian and China-Tanzanian Bilateral Investment Treaties
Amy Man
PhD Candidate/Associate Lecturer
University of the West of England

2. OUTLINE Core argument:
IIL is not best placed to reflect the interests of developing host states.
Emerging actors (e.g. China) have taken positive steps but change is minimal.
Structure
1) Introduction
2) The role of the State: IIL and Regulation
3) China’s investment agreements: A critique
a) China-Ethiopia
b) China-Tanzania
4) Conclusion

3. INTRODUCTION
Neo-liberal assumption: FDI will improve economic development  standard of living
Developing states conclude IAs  Signal commitment and encourage capital inflows
Indicates: Willingness to join the existing game.
But the playing field is uneven.

4. THE ROLE OF THE STATE: IIL & REGULATION
Tension: Becoming parties – submit to terms
Submit to regulation of their policies
Do not have regulatory freedom – encroaches on sovereign autonomy
Standards that favour foreign investors and capital-exporting states
Vulnerable to investment dispute claims

5. The Role of the State: IIL & Regulation
Argentinean financial crisis 2001
Legal claims estimated at US$17 billion
CMS v. Argentina
Award = US$133.2 million
Not absolved of IIL obligations under IAs
Must provide a stable environment for investments

6. The Role of the State: IIL & Regulation
‘Regulatory chill’
Integrate into a system which encroaches on their regulatory space.
Traditional origin: FCNs and capital-exporting states
Desire to limit risk
Protect assets
No explicit requirement to protect public interest in host state

7. The Role of the State: IIL & Regulation
Developing States
Suspicious of IIL system – control over assets & resources
Desire freedom to enact policies & legislation
Join the system nonetheless
Emerging Actors: Signs of change
China
Prudent navigation of system and existing rules

8. EMERGING ACTOR: CHINA
Shift from capital-importing economy to major capital-exporting economy
Outflows estimated at US$128 billion (2015)
Integration within the IIL regime - generations of IAs
145 BITs concluded
Reflection of different economic policies
Second-generation – China-Ethiopia BIT
Third-generation – China-Tanzania BIT.

9. CHINA-ETHIOPIA BIT (1998)
Second-generation: amongst the oldest Chinese IA in force
Little tailoring unlike China-Tanzanian counterpart
Inclusion of usual standards of treatment characteristic of IAs:
FET (Art. 3(1))
MFN (Art. 3(2))
Absence of national treatment

10. CHINA-TANZANIA BIT (2014) Third-generation: most recent
Shift to major exporter of capital
Hallmarks features of IAs remain but with some modest but notable changes

11. China-Tanzania BIT (2014) National treatment
Art. 3(2) – allows host to adopt measures to promote local entrepreneurship
MFN
Art. 4 – Usual formulation
FET AND full protection and security
Art. 5(2) fair and judicial proceedings
Art. 5(3) implementation of police measures

12. China-Tanzania BIT (2014) Art.10:
‘… it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures… [i]n the pursuit of FDI…’
Unique inclusion
Recognition of social norms outside of IIL remit that IIL can/does encroach upon

13. China-Tanzania BIT (2014) Art. 10 Conditional language
Lacks legal legitimacy
BUT
Positive value/step
Adapting existing rules and willingness to do so
Future developments will require further scholarship

14. CONCLUSION FDI has a positive influence over development?
IAs signed in hope
Challenges: vulnerable to claims and encroaches on regulatory space
Expectation to join and participate where rules do not represent interest
New players e.g. China do not substantially change the game