Mohammad Belayet Hossain
Lecturer, School of Law,
Chittagong Independent University of Bangladesh
The ‘national treatment’ is one of the principle pillars of World Trade Organization (WTO) agreements and its standard is perhaps the single most important standard of treatment enshrined in international investment agreements (IIAs). At the same time, it is perhaps the most difficult standard to achieve as it touches upon economically (and politically) sensitive issues. In fact, no single country has so far seen itself in a position to grant national treatment without qualifications, especially when it comes to the establishment of an investment. National treatment can be defined as a principle whereby a host country extends to foreign investors treatment that is at least as favourable as the treatment that it accords to national investors in like circumstances. In this way the national treatment standard seeks to ensure a degree of competitive equality between national and foreign investors. The principle of national treatment has two facets to it. One of them has its origins in the Calvo doctrine under which aliens and their property are entitled only to the same treatment accorded to nationals of the host country under its national laws. The other has its basis in the doctrine of state responsibility for injuries to aliens and their property, under which customary international law is regarded to have established a minimum international standard of treatment to which aliens are entitled. This concept of international minimum standard would allow for treatment more favourable than that accorded to nationals where this falls below the international minimum standard. Historically, the idea based on the Calvo doctrine is favoured by the developing countries and developed countries favour the idea based on the principle of state responsibility. This article aims to provide an understanding of the international minimum standard of treatment and state responsibility in relation to the bilateral investment treaties (BITs) or free-trade agreements (FTAs). In doing so, this article will highlight some of the relevant cases where the international centre for settlement of investment disputes (ICSID) attempted to accord a narrow meaning to the term ‘full protection and security’, which set-up guidelines for later cases.
Keywords: International Minimum Standard, BITs, ICSID, FTAs, Foreign Investment