On The MFN Clauses In The Multilateral Investment Treaty

As the world is getting more globalized today, the relationships on trade, service and investment among nations are deepening than ever. To regularize the order of the relative activities, the international society give efforts to make a series of laws and regulations concerning trade, service and investment to make sure the governments and their nationals to follow these laws and regulations. This has guaranteed a fair competition atmosphere, ensuring a win-win situation. All the nations are aware that multilateralization is the future. Furthermore, in the field of trade and service, it has already been multilateralized, including the laws. But so far, most of the investment treaties are in the form of Bilateral Investment Treaty (BIT), not being multilateralized as in the trade area.Foreign investments both domestically and on foreign territories are very important to the economy of a nation. The foreign investment from other nations can improve the development of basic infrastructure, create more job, increase the GDP. Meanwhile, to invest in a foreign nation can help the domestic enterprises get stronger, and earn more foreign currency. So, to create an investment environment more free and fair becomes the common goal of all the nations. The multilateralization of the investment relations can make this goal come true. The multilateralization of the investment relations does not only include the investment itself, but also the dispute settlement resolutions. So how to make investment relations multilateralized? I think the best way is to apply Most-Favored-Nations (MFN) clauses into the investment relations.MFN clauses first appeared in international trade of goods. As the society evolves, MFN clauses gradually applies to trade of services, then the investment relations. MFN clauses is the core value of trade of investment of the world today. Its purpose is to eliminate the different treatment, create a fair competition environment, to make the capital move more efficient, and the allocation of resources more reasonable.I think the effect of MFN clauses on international trade relations mainly applies to the substantive protection and arbitration issues. The application of MFN clauses can make the beneficiary nation can apply for the more favorable treatment and substantive protection from the third-nation investment treaty. Although there might be some explicit restrictions on the application of the MFN clauses, or the treaty itself has some indirect limits on the application of MFN clause. But there are circumstances that the MFN clauses itself can circumvent the restriction, and eventually get the more favorable treatment. This has proved that the MFN clauses can not only give substantive protection to the beneficiary nations, even if its application has been restricted, it is still a powerful tool to achieve multilateralization.In the practice of international arbitration, the argument on whether to apply MFN clauses is at hand. Especially on the issue that if the MFN clauses can be applied to the jurisdiction and resolve the disputes between the investor and the state. I try to use some related cases and opinions of the courts and tribunals, as well as the interpretation of the Vienna Conventions on Laws of Treaties to prove that for most of the time, the MFN clauses can be applied to the issue of jurisdiction and the investor---state dispute settlement.Finally, I give some opinion on the application of MFN clauses concerning China, and try to giving some advices that is best for our nation.Through this article, I think the broad application of MFN clauses, is very useful for the realization of the multilateralization of international investment relations. It is the key to it.