Prof. Dr. Lawan
Thanadsillap
akul
Investment Liberalisation
under FTAs and Some Legal
Issues in International Law
Prof. Dr. Lawan Thanadsillapakul
Scope of Presentation
 The Main issues of Market Liberalization
Understanding the Meaning of FTA
The substances of the New Model of FTA
 Investment Liberalization under the Bilateral Investment Treaty
State Sovereignty
Restriction over entry and establishment
 Investment Protection
Definition of Investment and Investor
Expropriation
Fund transfer
Dispute Settlement Mechanism
Ideology
Prof. Dr. Lawan
Thanadsillap
akul
Neo-Liberalism/Neo-Classical
- Global Market
- Market function
- No state intervention
- No frontier
- No barrier
State and Market
Mechanism for balancing State and Market
Competition Law and Policy, Anti-Trust Law,
Anti-Monopoly Law
Main Issues of Market Liberalization
 Implementation of the Trade and Investment Liberalization
Economic Theory – Neo Classical – Neo Liberalization
Problematic Issues– Market Failure – Policy Failure
 Economic Instruments for Trade and Investment Liberalization
Rule – Based Market Economy
Power – Based Market Economy
 Capacity Building and the enhancement of competitiveness
Levelled Playing Field
Unequal Players
Inequity of the Rule of the game
 SWOT Analysis
Understanding the meaning of FTA
 FTA = Free Trade Area and
 FTA = Free Trade Agreement
 Problematic Issues– The content and context of Free Trade Agreement
 The New Model of Free Trade Agreement: Investment Liberalization
 The Differences between Bilateral Investment Agreement and Investment
Chapter under Free Trade Agreement
 The incorporation of GATT/WTO – Plus requirement into investment chapter
 The Market cannot function well under the new FTA model
 Too Stringent Intellectual Property Protection such as the prohibition of CL
 No clear definition of indirect expropriation
 The problem of environment protection
 The Replacement of state barriers by Restrictive Business Practices of TNCs
Investment liberalization
under BITs
Maintain state sovereignty to control FDI
Prof. Dr. Lawan
Thanadsillap
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Admission & Right of Establishment
Restricted areas of investment
Restricted entry and investment
Restricted foreign equity ratio or Limitation on Foreign ownership
Screening process
Control on the operation of foreign investors
Limitation on the type and number of foreign personnel and their
duration of stay
Limitation on ownership of land
Requirement that domestic residents be part of board of
directors and requirement to implement investment measures
Legal Impediments
•
•
•
•
•
Restrictions on investment
Restrictions on capital repatriation
Restrictions on industrial sectors
Restrictions on bureaucratic procedures
Restrictions on TRIMs – Trade-related
investment Measures
• Restrictions on investment protection
• Restrictions on Taxation and fees
The New FTA Model
Prof. Dr. Lawan
Thanadsillap
treated as favourably
as
akul
to ensure that foreign companies will be
national of host country and their competitors
to protect FDI from direct and indirect expropriation of investments
and ensure that foreign investors will be fairly compensated
to ensure free transfer of funds into and out of the host country using
the market rate of exchange .
to limit the ability of the host government to require foreign investors
to adopt investment measures
to ensure the right of foreign investors to submit an investment
dispute with the treaty partner’s government to international arbitration
to give foreign investors the right to engage the top managerial
personnel of their choice, regardless of nationality
to ensure the use of labour regardless of nationality
Legal frameworks governing
foreign investment
Prof. Dr. Lawan
Thanadsillap
akul
Domestic Laws and regulations
International Law
International Codes of conduct, Guidelines
Treaty Regime (BITs, Regional Treaty,
Multilateral Treaty)
WTO Rules and Regulations relating to
investment
Special regime for investment liberalisation
Unilateral liberalization of investment
Legal frameworks governingProf.
FDI at the international sphere
Dr. Lawan
Thanadsillap
akul
International Law
- Traditional recognized absolute State sovereign rights
- Diplomatic protection
- State responsibility
- Minimum international standard of treatment
International Codes and Guidelines, soft law
The role of WTO
- Multilateral Investment Agreement
- General Agreement on Trade related-investment measures
(TRIMs)
- The General agreement on trade in services (GATs)
- General Agreement on Trade-related intellectual property rights
(TRIPs)
Regional economic integration : EU, NAFTA, ASEAN (regional
level)
Prof. Dr. Lawan
Thanadsillap
akul
Investment Treaty Regime
Bilateral Investment Treaty
Regional investment treaty
Multilateral investment treaty
Bilateral Free Trade Agreement
The scope of investment
agreement
Prof. Dr. Lawan
Thanadsillap
akul
The scope of investment agreements is defined
primarily through definitions of key terms, such as
“investment” and “investor”.
The critical functions of the definition are the
identification of assets to which the treaty applies
The determination of the nature of the obligations
created by the treaty
Coverage of the
Treaty/Agreement
Prof. Dr. Lawan
Thanadsillap
akul
Territorial Coverage
- Federal State
- Single State
- State Parties
- Third Parties
Personal Coverage
- Investor: Juristic person, Natural Person
Prof. Dr. Lawan
Thanadsillap
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Coverage of the definition
Investment
Is the term defined by reference to types of assets
that, in theory, could amount to an “investment”?
Or does one also refer to the underlying
transaction in which those assets are involved?
Investor
Is this term defined by reference to categories of
legally recognized persons?
Or on the basis of the transactions involved,
regardless of the legal status of the person or entity
undertaking that transaction?
Prof. Dr. Lawan
Thanadsillap
akul
Definition of Investment
The broad asset-based definitions of
investment
The narrow asset-based definition
The enterprise-based and
transaction-based definition
Investment
Prof. Dr. Lawan
Thanadsillap
akul
Any kind of asset
Movable and immovable property
Interest in the companies ( both portfolio and
direct investment, but generally portfolio and short
term investment would be excluded)
Contract rights (service agreement)
Intellectual property
Business concession
Each of these types of investment has different
economic and development implications for host and
home countries
The Broad Asset-based Prof. Dr. Lawan
Thanadsillap
Definition of Investment
akul
Property: tangible property, merchandise
Property rights: mortgage, lien, pledge,
company’s interest, debt, equity, debenture, bonds,
portfolio investment
Contractual rights: professional services,
turnkey contract, insurance policy, contract for
sale of goods or services, claims to money
Intellectual property rights: trademarks, trade
secret, patent, copyrights, technical process, knowhow, good will
Business concession rights: resources concession
Prof. Dr. Lawan
Thanadsillap
akul
The Narrow asset-based
definition
Limitation to permitted investment
Limitation on time of establishment
Limitation on nature of the investment,
i.e. only FDI or indirect investment (port
folio)
Limitation to size, sector: energy
The enterprise-based
Prof. Dr. Lawan
Thanadsillap
akul
Establishment & acquisition of an enterprise
Shares of enterprise
Transaction-based
Transaction of establishment
Liquidation of enterprise not asset
Lawan
The term “investment” and itsProf. Dr.Thanadsillap
interaction with other related issues akul
Investment and admission and establishment
Investment and National Treatment and MostFavoured-Nation Treatment
Investment and incentives
Investment and full protection and security
Investment and taking of property
Investment and funds transfer
Investment and dispute settlement
Definition of Investor
Prof. Dr. Lawan
Thanadsillap
akul
Entities considered investors
- Exclusions based on legal form
- Exclusions based on purpose
- Exclusions based on ownership
Establishing the link
- Natural persons
- Legal entities
Nationality of enterprise/legal entity
- Seat of the enterprise/company
- Incorporation place
- Controlling Shareholder
Admission & Right of
Establishment
Prof. Dr. Lawan
Thanadsillap
akul
State’s sovereign Rights
The form of Controls or restrictions over the
admission and establishment of foreign investor
The acquisition of interests in local business
The limitations on foreign ownership and control
Registration and report requirements
The conditional entry of foreign investors: investment
measures, incentive regimes, economic policy
Sovereign Rights of Host Country toProf.
admit and control foreign investment
Pre entry
Pre-entry treatment
Total Exclusion
Exclusion from negative
list, sensitive list, closed
sectors
Screening
Quantitative restriction
Conditional entry
Restricted allocation
Etc.
Dr. Lawan
Thanadsillap
akul
Post entry
Post- entry Treatment
Form of establishment
Ownership control
Governmental intervention
Special requirements
Other Restrictions
Control over the operation of
MNEs
Expropriation/
Nationalization
Etc.
Prof.
Measures relating to
admission and establishment
Dr. Lawan
Thanadsillap
akul
Control over access to the host country economy
Conditional entry into the host country economy
Measures relating to ownership
and control
Control over ownership
Controls based on limitation of shareholder powers
Control based on governmental intervention in the
running of the investment
Other types of restriction
Control over access to theProf. Dr. Lawan
Thanadsillap
host country economy
akul
Absolute ban on all forms of FDI: Former centrally –
planned economies prior to the transitional process.
Closing certain sectors, industries or activities to FDI
for economic, strategic or other public policy reasons.
Quantitative restrictions on the number of foreign
companies admitted in specific sectors, industries or
activities for economic, strategic or other public policy
reasons.
Investment must take a certain legal form:
incorporation in accordance with local company law
requirements.
Compulsory joint ventures either with state
participation or with local private investors.
Lawan
Control over access to theProf. Dr.Thanadsillap
akul
host country economy
General screening/authorization of all investment
proposals; screening of designated industries or
activities, screening based on foreign ownership and
control limits in local companies.
Restrictions on certain forms of entry: mergers
and acquisitions may not be allowed, or must meet
certain additional requirements.
Investment not allowed in certain zones or regions
within a country.
Admission to privatization bids restricted, or
conditional on additional guarantees, for foreign
investors.
Exchange control requirements.
Conditional entry into host Prof.
country: General conditions
Dr. Lawan
Thanadsillap
akul
Conditional entry upon investment meeting
certain development or other criteria
(environmental responsibility, benefit to national
economy) based on outcome of screening
evaluation procedures
Investors required to comply with requirements
related to national security, policy, customs, public
morals as conditions of entry.
Prof. Dr. Lawan
Condition based on capital
Thanadsillap
akul
requirement
Minimum capital requirements.
Subsequent additional investment or
reinvestment requirements
Restrictions on import of capital goods needed
to set up investment ( e.g. machinery, software)
possibly combined with local sourcing
requirements.
Investors required to deposit certain guarantees
( e.g. for financial institutions)
Other Conditions
Prof. Dr. Lawan
Thanadsillap
akul
Special requirements for non-equity forms of
investment (e.g. BOT agreement, licensing of
foreign technology).
Investors to obtain licenses required by
activity or industry specific regulations
Admission fees ( taxes) and incorporation fees
(taxes)
Other performance requirements ( e. g. local
content rules, employment quotas, export
requirements).
Measures relating to ownershipProf.
and control: Control over
ownership
Dr. Lawan
Thanadsillap
akul
Restrictions on foreign ownership : no more
than 50% foreign-owned capital allowed.
Mandatory transfers of ownership to local
firms usually over a period of time ( fade-out
requirements).
Nationality restrictions on the ownership of the
company or shares thereof
Control based on limitationProf.
of shareholder powers
Dr. Lawan
Thanadsillap
akul
Restriction on the type of shares or bonds held by
foreign investors e.g. shares with non-voting right
Restrictions on the free transfer of shares or
other propriety rights over the company held by
foreign investors e.g. shares cannot be transferred
without permission.
Restrictions on foreign shareholder rights e.g. on
payment of dividends, reimbursement of capital
upon liquidation, on voting rights, denial of
information disclosure on certain aspects of the
running of the investment.
Controls based on governmental
intervention in the running of the
investment
Prof. Dr. Lawan
Thanadsillap
akul
Government reserves the right to appoint one or
more members of the broad of directors.
Restriction on the nationality of directors, or
limitations on the number of expatriates in top
managerial positions
Government reserves the rights to veto certain
decisions, or requires that important board decisions
be unanimous
“Golden” shares to be held by the host Government
allowing it, for example, to intervene if the foreign
investor captures more than a certain percentage of the
investment
Government must be consulted before adopting
Host Country’s General post-Prof.
entry Control over FDI
Dr. Lawan
Thanadsillap
akul
Control over Capital movements
Control through tax legislation
Control through disclosure legislation
Control through “merger” legislation
Control over operations resulting in divestment
Dispute Settlement
Expropriation
- Traditional concept
- Creeping expropriation
Related issues to Host’s
country control
Prof. Dr. Lawan
Thanadsillap
akul
Definition of investment : the limitation of
power of the host country to control or to allow
greater discretion to the host state to control FDI
Exceptions and derogations: national security,
public health, public policy, specific industries
Incentives
National treatment and most favoured-nation
treatment
Social responsibility
Transparency
Dispute settlement
Prof. Dr. Lawan
Thanadsillap
akul
Other types of restriction
Management restrictions on foreign- controlled
monopolies or upon privatization of public companies.
Restrictions on land or immovable property
ownership and transfers thereof.
Restrictions on industrial or intellectual property
ownership or insufficient ownership protection.
Restriction on the use of long-term (five years or
more) foreign loans e.g. bond
Country Approaches to entryProf.
and establishment of FDI
Dr. Lawan
Thanadsillap
akul
The “Investment Control” model, which preserves
full State Control over entry and establishment;
The “Selective Liberalization” model, which offers
limited rights of entry and establishment, i.e. only in
industries that are included in a “positive list” by the
agreement of the contracting States;
The “Regional industrialization programme” model,
which offers full rights of entry and establishment
based on national treatment for investors from member
countries of a regional economic integration
organization only for the purposes of furthering such a
programme
Country Approaches to entryProf.
and establishment of FDI
Dr. Lawan
Thanadsillap
akul
The “Mutual national treatment” model, which
offers full rights of entry and establishment based
on national treatment for all natural and legal
persons engaged in crossed-border business
activity from member countries of a regional
economic integration organization;
The “Combined national treatment/mostfavoured-nation treatment” (NT/MFN) model,
which offers full rights of entry and establishment
based on the better of NT or MFN, subject only to
reserved “negative” lists of industries to which
such rights do not apply.
Transfer of Funds
Prof. Dr. Lawan
Thanadsillap
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Conditional fund transfer
- Balance of Payment
- Financial Crisis
- Short term Capital control
Free/Liberal fund transfer
Returns
Prof. Dr. Lawan
Thanadsillap
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The earnings from investment
The elements of the term returns mirror the
element of the term investment
Investment
-Shares
-Debt
- Intellectual Property
-Service contract
Returns
- Dividends
- Interest payment
- Royalties
 To identify the extent of covered return to be
protected under the treaty
Commodity – Based
Input TRIMs
Prof. Dr. Lawan
Thanadsillap
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Local content requirement
Laws of similar
Minimum export requirement
Trade – balancing requirement
Limitation on import
Foreign- exchange restriction
Prof. Dr. Lawan
Thanadsillap
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Factor – Based Input TRIMs
Local content requirement
Local - equity requirement
Technology transfer requirement
Research & Development requirement
National participation in management
Local hiring target
Expatriate quota
Commodity – Based
Output TRIMs
Prof. Dr. Lawan
Thanadsillap
akul
Minimum – export requirement
Trade balance requirement
Export control
Market reserve policy
Product mandating requirement
Licensing requirement
Export performance requirement
Domestic sales requirement
Manufacturing Limitation
Manufacturing requirement
Factor – Based Output
TRIMs
Prof. Dr. Lawan
Thanadsillap
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Technology transfer
requirement
Earning Remittance Limits
Prof. Dr. Lawan
Thanadsillap
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Treatment to foreign investor
Pre-establishment
Post-establishment
National Treatment
Prof. Dr. Lawan
Thanadsillap
akul
The nature and origins of the national
treatment standard
Scope and application
The substantive content of the national
treatment standard
The relationship between national treatment
and other general standards of treatment
“De jure” and “de facto” treatment
Exceptions to national treatment
Definition
Prof. Dr. Lawan
Thanadsillap
akul
National treatment can be defined as
principle whereby a host country extends
foreign investors treatment that is at least
favourable as the treatment that it accords
national investors in like circumstances.
a
to
as
to
In this way the national treatment standard
seeks to ensure a degree of competitive equality
between national and foreign investors.
The nature and origins of the NTProf.
standard under International Law
Dr. Lawan
Thanadsillap
akul
The standard represents one of the competing
international law doctrines for the treatment of
the person and property of aliens “The Calvo
Doctrine” or the so called “Negative National
Treatment”
The doctrine of State Responsibility for
injuries to aliens and their property. It asserts
that customary international law establishes a
minimum international standard of treatment to
which aliens are entitled, allowing for treatment
more favourable than that accorded to nationals
where this fails below the international standard
General application of NT
Prof. Dr. Lawan
Thanadsillap
akul
National treatment typically extends to the post-entry
treatment of foreign investors.
Some international investment agreements also extend
the standard to pre-entry situations. (US and Canada
BITs)
Normally such an extension accompanied by a
“negative list” of excepted areas of investment activity to
which NT does not apply, or a “positive list” of areas of
investment activity to which NT is granted.
Several types of general exceptions to national
treatment exist concerning public health, safety and
morals, and national security.
National Treatment VS
MFN Treatment
Prof. Dr. Lawan
Thanadsillap
akul
National treatment seeks to grant treatment
comparable to domestic investors operating in the
host country. (to secure a certain level of treatment
for FDI in host country)
NT serves to eliminate distortions in competition
and thus is seen to enhance the efficient operation of
the economies involved
MFN seeks to grant foreign investors treatment
comparable to other foreign investors operating in
the host country
Prof.
The differences of NT that
applicable to trade and investment
Dr. Lawan
Thanadsillap
akul
National Treatment in trade agreement
is applicable to “Product”
The national treatment in investment
agreement is applicable to “investments”
and/ or “investors”
Prof. Dr. Lawan
Thanadsillap
akul
“De jure” and “De facto” NT
De Jure NT, the treatment of foreign
investors based on NT provided under national
law and regulation or under the investment
treatment
De facto NT, the treatment of foreign
investors under the factual measures that might
work against NT e.g. licensing requirements,
qualification requirements. Although these
measures may be justified on policy grounds.
Prof. Dr. Lawan
Thanadsillap
akul
Exceptions to National treatment
Classification of exceptions
General exceptions
Subject-specific exceptions
Industry-specific exceptions
Reciprocal national treatment clauses
Exceptions based on development considerations
Prof. Dr. Lawan
Thanadsillap
akul
Exceptions to national treatment
General exceptions: public health, order and
morals, and national security
Subject-specific exceptions: intellectual property
rights guaranteed under IP conventions, taxation,
prudential measures in financial services, incentives,
safeguards, cultural industries exception
Country specific exceptions: specific industries for
national economic policy and social policy
Reciprocal national treatment clauses
Exceptions based on development considerations
Monitoring
Prof. Dr. Lawan
Thanadsillap
akul
Most-Favoured-Nation Treatment
Definition and scope
MFN treatment and equality of competitive
opportunities
The “free rider” issue
The identity issue
Exceptions: general exceptions, reciprocal
subject-specific exceptions, country-specific
exceptions
The rationale behind the applicationProf.
of MFN to foreign investors
Dr. Lawan
Thanadsillap
akul
The most-favoured-nation treatment (MFN)
standard is a core element of international
investment agreements. It means that a host
country treats investors from one foreign country
no less favourably than investors from any other
foreign country in like cases.
The MFN standard gives investors a guarantee
against certain forms of discrimination by host
countries, and it is crucial for the establishment of
equality of competitive opportunities between
investors from different foreign countries.
Expropriation
Prof. Dr. Lawan
Thanadsillap
akul
Direct expropriation
Indirect expropriation /Creeping
expropriation
- Taxation
- Disguised Environmental Measures
- Di-vestment
- Conditional fund transfer
- Legal Enforcement
- etc
Intellectual property Rights
Prof. Dr. Lawan
Thanadsillap
akul
Ex.
- Berne Convention
- Rome Convention
- TRIPs Art. 4 (6) (protection of
reciprocity Rule)
- NAFTA Art. 1108 (5) (not limited to
protection of reciprocity but applies to IP
rights in general
Abuse of intellectual
property rights
Prof. Dr. Lawan
Thanadsillap
akul
Abuse of intellectual property rights (IPR), for
example where technology-licensing arrangements
abuse the monopoly position of IPR holders, such
as through non-competition clauses and the socalled ‘grant back’. This means the licensee is
required to assign inventions made in the course of
working on the transferred technology back to the
licensor. Another aspect of IPR abuse, “noncontestation clauses” is that the licensee is
prevented from contesting the validity of the IPR
or other right of the licensor. IPR abuses might be
subject to general competition rules on horizontal
and vertical restraints.
Dispute Settlement
Prof. Dr. Lawan
Thanadsillap
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State – State Dispute settlement
State – Investor Dispute settlement
Dispute Settlement
Judicial System
Arbitration
Prof. Dr. Lawan
Thanadsillap
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Prof. Dr. Lawan
Thanadsillap
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Investment Promotion
Investment Incentives
Prof. Dr. Lawan
Thanadsillap
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Tax Incentives
Non – Tax Incentives
Tax Incentives
Prof. Dr. Lawan
Thanadsillap
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An inducement offered in the form of an abatement of taxes such as:
Tax holiday from corporate income tax
Exemption from income tax, custom duty, corporate tax, Business levy,
withholding tax on remittance of profit, dividends and other distribution
Tax holiday from dividends tax
Tax allowance
Concession from duty/levy
Abatement of adjusted income
Double deduction
Tax credit
Deduction for labour cost
Deduction cost of construction
Capital Loss Carry forward
Loss write-off provision
Any kind of tax exemption
Non – Tax Incentives
Prof. Dr. Lawan
Thanadsillap
akul
The incentives offered by the government to
induce trade and investment either from abroad
or domestic, or both sources. But they are not in a
form of tax abatement such as:
One-stop services
Favourable trade and investment environment
Good Public infrastructure
Telecommunication Network
Favourable legal framework
Investment Subsidy
Competitiveness
Prof. Dr. Lawan
Thanadsillap
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Capital
Technology
Management
Consumption Behavior
Global network, Global chain
Anti-competitive
business practices
Prof. Dr. Lawan
Thanadsillap
akul
Horizontal restraints
Vertical restraints
Abuse of intellectual property rights
Abuse of market dominance
Mergers and acquisition policies
Public undertakings and enterprises with special
privileges
Horizontal restraints
Prof. Dr. Lawan
Thanadsillap
akul
Horizontal restraints or the hard-core cartels
among firms in an oligopolistic market,
engaging, for example,
in price fixing,
output restrictions,
market division,
customer allocation, and
collusive tendering and
other anti-competitive co-operation between
firms selling competing products.
Vertical restraints
Prof. Dr. Lawan
Thanadsillap
akul
Vertical restraints or distribution strategies
between manufacturers, suppliers or
distributors, such as:
tying the sale of one good as a condition for
the purchase of another good;
exclusive dealing (the seller requires the
buyer to purchase the products only from
the seller);
Vertical restraints
Prof. Dr. Lawan
Thanadsillap
akul
territorial restraints (the seller requires the
buyer/distributor to resell the product within a
limited geographical area);
and resale price maintenance (the seller
requires the buyer to resell the product only at a
specified price).
Resale price-fixing also tends to be generally
prohibited. The pro- and anti- competitive effects
of such vertical restraints need to be evaluated
and where necessary controlled.
Abuse of intellectual
property rights
Prof. Dr. Lawan
Thanadsillap
akul
Abuse of intellectual property rights (IPR), for
example where technology-licensing arrangements
abuse the monopoly position of IPR holders, such
as through non-competition clauses and the socalled ‘grant back’. This means the licensee is
required to assign inventions made in the course of
working on the transferred technology back to the
licensor. Another aspect of IPR abuse, “noncontestation clauses” is that the licensee is
prevented from contesting the validity of the IPR or
other right of the licensor. IPR abuses might be
subject to general competition rules on horizontal
and vertical restraints.
Prof. Dr. Lawan
Thanadsillap
akul
Abuse of market dominance
Abuse of market dominance: dominant firms accounting for a
significant market share may attempt to monopolise a market,
for instance through price discrimination,
predatory low prices,
refusal to deal, or
vertical restraints.
Rules against the abuse of a dominant position may be
conduct-oriented, in other words, a general prohibition against
monopolising and foreclosure of competition. Another
approach is result-oriented, with a prohibition for example of
predatory pricing only if the losses can be recouped.
Prof. Dr. Lawan
Thanadsillap
akul
Mergers and acquisition policies
Mergers and acquisition policies, where
horizontal, vertical or conglomerate mergers,
may reduce competition or decrease efficiency.
Merger policies may be designed to ensure the
contestability of markets by preventing
monopoly or price-setting by a single seller
and price-taking by a single buyer, as well as
oligopolistic or monopolised market power.
On the other hand, acquisition policies also
overlap with industrial policy instruments.
Prof. Dr. Lawan
Thanadsillap
akul
Public undertakings and
enterprises with special privileges
Public undertakings and enterprises with
special privileges, which are not required to
behave according to market principles,
(GATT Article XVII and EC Treaty Article
90) in view of their market power or
financial independence. This includes firms
with exclusive trading rights and
monopolies.
The Impacts of FTA on
state sovereignty
Prof. Dr. Lawan
Thanadsillap
akul
The impact on Legislation
The impact on Judicial System
The impact on the Enforcement of Law and
Regulations
The impact on Administrative System
The impact on Territorial Jurisdiction
The impact on Personal Jurisdiction
Fundamental impact of
FTA on Environment
Sovereign Rights
Legal Enforcement
Over exploitation
Prof. Dr. Lawan
Thanadsillap
akul
Negative impacts of FTA
Prof. Dr. Lawan
Thanadsillap
akul
Agriculture: the instability of the international price
of agricultural commodities, Lower agriculture returns
are linked to poverty, a major cause of environmental
degradation
Energy: to mitigate climate change , over-exploitation
Fisheries: over-exploitation and illegal, unreported
and unregulated fishing.
Forestry: the mitigation of global warming and the
conservation of biological diversity, illegally harvested
forest products, the illegal exploitation of forestry
resources, illegal logging
The areas need careful liberalization
•
•
•
•
•
•
Intellectual Property Rights Protection
International Investment rules
Trade – related investment Measures
The Treatment of Foreign Investors
The liberalization of Trade in services
Mutual Recognition
The sustainable development
• To balance State sovereignty and Market
• To balance Liberalization and the
conservation of natural resources and
environment
• To generate wealth of the local people
• To evenly distribute income throughout the
country and the world
• To maintain cultural way of life and local
wisdom
Environment protection: Development –
Related Issues and sustainable development
• Eco-System
• Climate Change, Ozone Layer, Air Pollution Control,
Noise Abatement, Water Protection and water
management, Waste and Waste Management, Soil
Protection, Chemicals and Environment Risks
• Preservation of Natural Resources
• Bio Diversity, Gene Technology and Environmental
Risks
• Social and Economic environment
• Regulatory Environment
• Warning System for environment problem, production
process, sustainable consumption and the effective
environment Measures
Prof. Dr. Lawan
Thanadsillap
akul
Thank you