(EU) and the Common Market of the South (MERCOSUR)? - FDCL
(EU) and the Common Market of the South (MERCOSUR)? - FDCL
(EU) and the Common Market of the South (MERCOSUR)? - FDCL
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116<br />
5.2 The case <strong>of</strong> Chile: Foreign investment regulation in <strong>the</strong> association<br />
treaty <strong>EU</strong> – Chile <strong>and</strong> its interaction with BITs <strong>and</strong> WTO rules<br />
A very good example for this is <strong>the</strong> “Association Agreement” <strong>of</strong> <strong>the</strong> <strong>EU</strong> with Chile,<br />
which was signed in November 2002 <strong>and</strong> entered into force in February 2003, 326 <strong>and</strong><br />
which in its corporation-friendly orientation is amended by a series <strong>of</strong> earlier bilateral<br />
investment treaties between <strong>the</strong> European states <strong>and</strong> Chile: 327<br />
• The mutual market access for foreign corporations which operate in <strong>the</strong> services<br />
sector, <strong>the</strong> non-services sector <strong>and</strong> <strong>the</strong> financial services area is safeguarded by<br />
<strong>the</strong> FTA, which in its notion <strong>of</strong> services follows <strong>the</strong> four GATS definitions (Mode<br />
1 “cross-border supply”, Mode 2 “consumption abroad”, Mode 3 “commercial<br />
presence” <strong>and</strong> Mode 4 “presence <strong>of</strong> natural persons”) <strong>and</strong> whose scope is defined<br />
by a positive-list.<br />
• The regulation to “protect” investment against “discrimination <strong>and</strong> expropriations”<br />
for “post-establishment” investment in services <strong>and</strong> financial services is covered<br />
by both FTA <strong>and</strong> bilateral agreements, <strong>the</strong> non-services area is regulated exclusively<br />
by bilateral investment agreements.<br />
• The principle <strong>of</strong> non-discrimination <strong>of</strong> NT is safeguarded tw<strong>of</strong>old for all three areas<br />
(by FTA <strong>and</strong> bilateral agreements).<br />
• The MFN principle is applied by <strong>the</strong> bilateral agreements.<br />
• Capital <strong>and</strong> pr<strong>of</strong>it transfers are also safeguarded tw<strong>of</strong>old through BITs <strong>and</strong> FTA for<br />
all three areas.<br />
• The possibility for investor-to-state disputes (post-establishment) has been assured<br />
by investors <strong>and</strong> corporations through <strong>the</strong> BITs.<br />
• The possibilities for trade-related disputes between states are regulated by <strong>the</strong><br />
BITs.<br />
• The regulation concerning services <strong>and</strong> public procurement is realized by <strong>the</strong><br />
FTA.<br />
• And additionally, in foreign trade-related issues <strong>the</strong> rules <strong>of</strong> “non-discrimination” <strong>of</strong><br />
<strong>the</strong> WTO apply.<br />
326 The English version <strong>of</strong> <strong>the</strong> agreement can be found, e.g., at: http://www.h<strong>and</strong>el-entwicklung-menschenrechte.org/<br />
fileadmin/christian/Chile-<strong>EU</strong>-AssociationAgreement.pdf.<br />
327 See: Republic <strong>of</strong> Chile: Investment <strong>and</strong> Transparency Provisions in Chile’s FTAs with <strong>the</strong> E.U. <strong>and</strong> U.S.A.<br />
Presentation before <strong>the</strong> OECD Committee on International Investment <strong>and</strong> Multinational Enterprises on April 10,<br />
2003.