The Research Of The Invesment Disputs Settlement Betwween The Investors And The States In Cafta

China and Association of Southeast Asian Nations (ASEAN) havecompleted the main negotiations of CAFTA agreements since thesignature of The Investment Agreement on15thAugust,2009whichdirectly promoted the foundation of the CAFTA. With the development ofthe CAFTA, in many areas, the investment between the parties hasaccelerated rapidly, such as infrastructure instruction, manufacturing,agriculture, communication, labor service cooperation and projectcontracting. ASEAN has become the preferred investment place of theChinese investors. At the same time, ASEAN preferred China as thebiggest investment market. In2009, China and ASEAN signed theAgreement on Investment of the Framework Agreement onComprehensive Economic Cooperation between the People’s Republic ofChina and the Association of Southeast Asian Nations (Investment Agreement). The14thclause of the Agreement regulated the settlement ofthe investment disputes between the investor and the states. However, dueto the complexity of the problem, the regulation seems useless. Thispaper tries to complete a better system of the settlement of the investmentdisputes.There are mainly four parts of the paper;The firs part describes the establishment of the CAFTA. Theinvestment which is between the investors and the states has taken muchplace in the whole investment between the countries of the CAFTA. So,the efficient settlement of the disputes is of vital importance.The second part comes up with the problems of the14thclause of theAgreement. The reasons could sum up as below: firstly, because of thevast disputes between the countries, the agreement is much conservative;secondly, due to the influence of the liberalization of the investment, theagreement neglects the sovereignty of the countries in some parts.The third part concludes the history of the protection of investment.From the ignorance of the issue to the vast protection of the investment,western countries have developed many way of investment protection,such as Convention on the Settlement of Investment Disputesbetween States and Nationals of Other States, Convention Establishingthe Multilateral Investment Guarantee Agency, North American FreeTrade Agreement and Multilateral Agreement on Investment. These Agreements were mainly between western developed countries, and theirfirst principle was liberalization of the investment.The last part puts forward the solutions to the existing problems.Through the liberalization of the disputes settlement procedure and theproper safeguard of the sovereignty of the countries, this paper design acomplete framework of the investment dispute settlement system whichcould solve the problems efficiently.