Investment Chapters in Free Trade Agreements

In addition to BITs, which are intended to protect investments that have already been made in the partner country (post-establishment phase), it is also possible to establish international rules to ensure that investors have free access to markets (pre-establishment phase). This makes it more difficult for the partner country to amend the legislation for protectionist reasons. Switzerland negotiates provisions on the establishment in industrial sectors (chapters on investment) and in services sectors (chapters on trade in services) in its free trade agreements.

The key obligation of the contracting states is the non-discrimination of foreign investors compared to its own investors (national treatment) and compared to investors from a third state (most favoured nation treatment). The contracting states may make reservations to the principle of non-discrimination in specific lists. Switzerland's reservations with regard to national treatment relates to the acquisition of land, to certain provisions of corporate law and to various laws governing the energy sector. Within the framework of the European Free Trade Association (EFTA), Switzerland is party to free trade agreements (which include corresponding market access provisions on investment) with Chile, Singapore, South Korea, Colombia, Peru, Ukraine, Hong Kong and several Central American States (Costa Rica, Guatemala, Panama). It has also signed a bilateral free trade agreement with Japan. Deteriorations of investment conditions for investors from partner countries are not allowed. Any discriminatory state measure in a given sector must therefore be compensated for by improvements of access conditions for investments in other sectors.

Specialist staff
Last modification 20.04.2016

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