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The United States is party to more than forty bilateral investment treaties (BITs) and to several trade agreements that contain investment chapters similar to BITs.1 The overall objective in such agreements is to impose restrictions on host governments regarding the treatment of foreign investors and their investments, and to provide a means for binding dispute settlement in the event that disputes arise relating to such treatment.
The United States developed a "model" BIT in 1982 to serve as a prototype for the negotiation of new BITs,2 and that model was further updated in 1994. As part of the trade promotion authority (TPA) legislation adopted in 2002, however, Congress issued certain new directives on the negotiation of trade agreements that protect U.S. investment abroad.3 Moreover, in the recent U.S. trade agreements with Chile and Singapore, the U.S. government began deviating from some of the standards of protection contained in the 1994 model BIT-in particular, by including certain provisions not contained in the model BIT, such as on transparency. Consequently, during 2003-04, the U.S. government pursued a revision of that model and, on February 5, 2004, released a draft of a new model BIT, consisting of thirty-six articles and four annexes.4
The new model contains far more detailed provisions on certain procedural matters, such as access to investor-state dispute settlement (Articles 23-34) and transparency of national laws and proceedings (Article 11), and...