BIICL and Steptoe International (UK) LLP are pleased to present our first comprehensive empirical study of Performance Requirement Prohibitions (PRPs) in International Investment Agreements (IIAs),
This study examines over 500 IIAs signed by six States (the United States, Canada, India, France, Australia, and Chile) from the early 1960s to date. This subject matter is both relevant and topical, as many States have turned back the clock and renewed their use of performance requirements as economic policy instruments in recent years.
It is increasingly common to find elaborate PRPs in complex trade and investment treaties. These include the recently concluded CPTPP, USMCA and RCEP. While PRPs are widespread, appearing in hundreds of IIAs, they have thus far eluded close and systematic scrutiny. Their complex inner-workings and their positioning at the crossroads between law and economics make it a perfect topic to shine a spotlight on.
This study provides a comprehensive framework to better understand the typically complex PRP provisions in IIAs and their implications, situating them within their broader geopolitical and economic context. In particular, it analyses the evolving trends and rationales underlying States' treaty-drafting approaches to prohibiting performance requirements - and to narrowing the scope and applicability of PRPs where deemed necessary. It also considers the kinds of disputes that have arisen under PRP provisions of IIAs, and the prospects for such disputes in the future.
This study is co-authored by Christophe Bondy, Alexandre Genest and Michael Lee of Steptoe International (UK) LLP with the support of Prof. Yarik Kryvoi, Director of the Investment Treaty Forum (ITF) at BIICL.
The study was launched at an Investment Treaty Forum event on the 18th of January 2024.