A Study On The Conflict Between Bilateral Investment Treaties Of EU Member States And EU Law

In today's economic globalization,the demand for foreign direct investment is growing rapidly,and will continue to increase for a period of time.However,due to the lack of multilateral international investment rules,BITs have become an important basis for investment protection.Since Germany and Pakistan concluded the world's first BIT in 1959,the number of treaties of this type has increased rapidly.Before Central and Eastern European countries joined the EU,BITs and EU laws always existed in the EU system and played their respective roles.However,due to the steady progress of EU integration and the surge in the number of BITs,the problem has become increasingly prominent.The conflict between the bilateral investment treaties of EU member states and the rules of EU law is becoming more and more intense.The main reason for this conflict is that the purpose of investment protection in BITs is different from the position of EU law in safeguarding the EU legal system and the single market within the Union.The EU legal rules led by the Lisbon Treaty failed to alleviate the conflict.The conflict not only affects the retention or abolition of the existing EU BITs,but also affects the negotiation and conclusion of new BITs.Since China and the EU began negotiations on a BIT in 2013,28 rounds of talks have been held so far,and the 29 th round of negotiations will be held from May 25 to 29,2020.The conflict between the original BITs of member states and EU law is bound to affect the proposal put forward by the EU and China during the negotiations.In view of this,it is necessary to explore the performance of the EU in response to the conflict between the BITs of EU member states and EU law,and come up with some thoughts on the existing solutions of the EU,so as to enable China in the future round of bilateral investment negotiations between China and the EU,accurately understand the BIT proposal proposed by the EU from the perspective of existing conflicts.Therefore China could make a good response strategy in advance and explore the construction of a new appeal mechanism in the light of China's national conditions.This paper is divided into four parts.The first is an overview of the conflict between the BITs of EU member states and EU law.Secondly,it analyzes the specific manifestations of the conflict,and studies the advantages and disadvantages of the measures proposed by the EU according to the conflict.Finally,it puts forward its own suggestions on China's response strategies for the negotiation of BITs between China and the EU.The first part is an overview of the conflict between the BITs of EU member states and EU law,which lays a theoretical foundation for the analysis of the following parts.First of all,this part clarifies the origin of the conflict between BITs and EU law,and the conflict between them has been hidden all the time.With the promotion of EU integration and the sharp increase in the number of BITs,the problem of conflict is gradually exposed.Secondly,it analyzes the root causes of the conflict between the treaty purpose of the bilateral investment treaty and the treaty purpose on which the EU law is based.Finally,combined with the theory of public international law,it is analyzed that the nature of conflict should be treaty conflict.Therefore,this paper mainly launches the analysis on this basis.The second part is the performance of the conflict between the BITs of EU member states and EU law.This part expounds the conflict between the BITs of EU member states and EU law from three aspects,in which the investment arbitration clause conflicts with the judicial system of EU law,and also violates the principle of nondiscrimination and the requirement of procedural justice of EU law.Therefore,the conflict between bilateral investment treaties and EU law appears irreconcilable.The third part is about the measures to solve the conflict between the BITs of EU member states and EU law.This part mainly expounds the targeted measures taken by the EU to solve the conflict between the BITs of the member states and the EU law.The introduction of the Lisbon Treaty has not alleviated the conflict.On the basis of expanding the connotation of the common business policy in the Lisbon Treaty,the EU has raised transitional arrangements and the EU Investment Court system as an effective means to resolve the conflict.However,after analysis,the transitional arrangement not only alleviates the conflict,but also gives rise to the hidden danger of the conflict between the new and old BITs in the future.As an alternative mechanism for investment arbitration,although the EU Investment Court system can meet the requirements of superficial compatibility with EU law,the EU Investment Court is also faced with the uncertainty of the establishment of the system and the effectiveness of the adjudication.And the nature of its award is unknown while it is difficult to be fully recognized and enforced by other countries under the ICSID and the New York Convention.At the same time,it is also faced with difficulties such as excessive transparency requirements and the lack of attractiveness of its own rigid mechanism to investors.The fourth part is the enlightenment to the negotiation of China-EU BIT.Based on the analysis of the third part,this part puts forward corresponding suggestions from three aspects: resolving the potential conflicts between the effectiveness of the new and old bilateral investment treaties,dealing with the EU Investment Court system and exploring the construction of a new appeal mechanism.In view of the ongoing negotiations on China-EU BIT,we should first of all pay attention to the settlement of the conflict between the effectiveness of new and old BITs.At the same time,investment dispute settlement mechanism is a core issue of negotiation.The EU Investment Court system proposed by the EU is not only a reform of the current ISDS mechanism,but also,more importantly,to resolve the conflict between BITs and EU law.China should be cautious about the Investment Court system.Also,China could take the EU and its member states as parties to ensure that the Investment Court system will be effective.Furthermore,China should clarify the effectiveness of the Investment Court's award and its enforceability under the ICSID and the New York Convention.At the same time,China needs to agree with the EU on appropriate transparency rules to exclude the application of the MFN clause in procedural matters.Finally,China should actively put forward its own appeal mechanism to promote the reform of the ISDS mechanism from the perspectives of improving the mechanism of selecting members of the Court of Appeal,defining the scope of appeal and improving the system of retrial,so as to strive for the right to speak in international rulemaking.