The EU and the US on investor-state dispute settlement reform

Both the European Union (EU) and the U.S. have joined the global chorus that investor-state dispute settlement (ISDS) drastically needs reform. Thus, the EU and the U.S. have developed new approaches in reforming ISDS. The EU is pushing for mechanisms that are consistent with EU law and place ISDS within the purview of the EU, as seen in Achmea v. Slovakia. The U.S., however, is advocating for reform by greatly reducing its use in future treaties, like in the U.S.-Mexico-Canada Agreement's (USMCA) investment chapter. Both argue their approach would result in a more fair, transparent, and accountable ISDS system that benefits every sovereign nation - or "multilateralism". Ultimately, however, both approaches use "multilateralism" to disguise the fact that they put the EU or America first in the pursuit of a "balanced" ISDS regime without jointly engaging other countries. Since Achmea was decided in March 2018 and the USMCA only entered into force on July 1, 2020, it is difficult to fully assess their respective impacts on investment law. Therefore, the publicly-available opinions of U.S. and EU practitioners, scholars, and politicians in the international arbitration community are the best way to evaluate the implications of these respective positions. This paper will highlight how the EU and the U.S.'s attempts to reform ISDS prioritize their own interests through manipulating legal doctrine instead of indicate a real ambition to transform ISDS into a multilateral regime with committed rule of law principles.