| Latin American views on the role of foreign investment have changed dramatically in the last few years. Today, the countries of this region acknowledge investment as base for economic growth. The study of the Chilean case can explain the reasons for this change in Latin America, since different Latin American countries have followed a pattern similar to the Chilean evolution in their search for a model of foreign investment regulation. Chile has recently signed a bilateral agreement with Canada (CCFTA) that is primarily intended to provide greater security for Canadian investments in that country. An important feature of this agreement is the adoption of a model of dispute settlement based on arbitration. The consequence of the acceptance of these arbitration mechanisms is that the Calvo theories, recognized until recently as the traditional doctrine of Latin American countries with respect to the resolution of disputes arising out from foreign investments, have been finally abandoned. In practice, these theories provide that foreigners must seek redress only in national courts and according to domestic law, in order to settle any dispute arising from their investment.;With these factors in the mind, this thesis proposes to answer, taking into account both Chilean and Canadian perspectives, two major questions: (1) does the CCFTA constitute an improvement for the protection of Canadian investments in Chile? and (2) what is the significance of the Chilean acceptance of the arbitration mechanism contained in this agreement? In order to answer both issues, this paper analyzes the current situation of the international provisions on foreign investment and the actual Chilean domestic framework. The analysis of the Chilean experience reveals why free trade agreements and, particularly, the dispute settlement mechanisms with respect to foreign investment, constitute a departure from the Calvo theories. |
