Since the NAFTA, it has become increasingly common to include in trade agreements a chapter dealing with investment, covering rights and obligations that had previously been the exclusive domain of bilateral investment treaties (BITs). Given the similarity in coverage, many of the issues addressed in this section are equally relevant to BITs and other international investment agreements (IIAs), of which more than 3,000 have been adopted worldwide over the past decades.

WTO law in the area of investment is embodied in the Agreement on Trade-Related Investment Measures (TRIMs). Relative to the typical BIT, TRIMs is a lightweight agreement, obliging parties only not to employ trade-related investment measures that are conditioned on local content requirements or on links to export performance. Investment is also covered in the WTO’s GATS, which regulates treatment of services supplied by means of foreign investment and commercial presence (so-called mode 3 services).

This section reviews a number of features that could be included in an investment chapter if the parties are aiming to ensure that investment contributes to sustainable development. It also reviews those elements often included in investment treaties and chapters that could potentially limit governments’ ability to effectively protect the environment through environmental regulation and implementation, and provides for options how to deal with this challenge.

This section draws heavily on the work of IISD’s investment program (see the works cited in Suggested Readings). Additional approaches and options discussed and proposed here can be found in the Investment Policy Framework for Sustainable Development (IPFSD, 2015 update) and the Roadmap for IIA Reform (Chapter IV of the 2015 World Investment Report), both published by the United Nations Conference on Trade and Development (UNCTAD).