Most Favoured Nation Treatment

Abstract

The most favoured nation (MFN) clause has a very long history. It has been included quite conspicuously in almost all bilateral investment treaties. Controversies emerged over the last few years regarding the international investment law regime, in particular the right of States to regulate for public interest, investor-State Dispute Settlement (ISDS) and the scope of MFN treatment. The result of these debates is the appearance of new formulations of provisions in Investment Chapters of free trade agreements (FTAs). The CETA’s MFN investment clause gives an example of this aim to reform international investment law. The MFN treatment formulation contained in Article 8.7 CETA is not innovative in itself. It resembles typical North American MFN formulations. The innovation rather derives from the exceptions that have been introduced by the EU and Canada. The CETA thus reflects an interesting evolution of the MFN treatment, showing an improvement of this important clause in international investment law rather than its deterioration.