“Indirect expropriation” in U.S. free trade agreements: the U.S. trade act of 2002 and beyond

Résumé 0

"This article addresses the debate regarding indirectexpropriation in the US Free Trade Agreements (FTAs).Departing from NAFTA, this study presents the main argumentsthat provoked a change in the usual US FTAs takings provisionin order to assure that foreign investors are not granted“greater rights” than those available to US local investors.This change, achieved through a set of guidelines containedin the US Trade Act of 2002, has been applied in subsequentnegotiations of FTAs between the USA and eleven countriesor regional groups. Although the adjustment to US domestic standards appears as an imposition over other alternatives,it seems to offer a sound approach to a topic that lackscoherence and symmetry at the international level.The study presents a further analytical review of the relevantprovisions of the U.S.-Chile and U.S.-Singapore FTAs, thefirst two treaties containing the new approach. It concludesthat the problems of the expropriation provision of NAFTAhave been confronted but only partly solved. This conclusionis reached after comparing the new provisions with theprinciples and standards of the Fifth Amendment of the USConstitution and its jurisprudential developments. Finally,this article advocates the process of enhancement of the normin future negotiations while it presents a non-exhaustive listof domestic policies that might be considered by host statesto strengthen their own institutions and legal systems beforethe entry into force of an FTA containing indirect expropriationprotections."