The post-Lisbon Common Commercial Policy in the field of foreign investment policy
The Lisbon Treaty for the first time expressly attributed exclusive competence to the EU in the area of foreign investment by adding foreign direct investment (FDI) to the scope of the Common Commercial Policy (CCP). The European Commission took not long to put these newly-won competences into use by designing its new European international investment policy. This new investment policy revealed the Commission’s broad interpretation of the competences conferred by the Lisbon Treaty. According to the Commission, the EU’s new common international investment policy should address both direct investment – i.e. investment made “with a view to establishing or maintaining lasting economic links” – and indirect investment, namely all those transactions involving debt or equity securities that do not establish a lasting economic link. Moreover, the common investment policy, as envisaged by the Commission, should cover both the pre-establishment and post-establishment phase.
The EU-Singapore FTA (EUSFTA) was the first trade agreement to rely on the EU’s competence in the field of common commercial policy as expanded post-Lisbon. This agreement embraces a wide range of fields, including trade in goods and services, government procurement, intellectual property rights, and investment liberalization and protection. All too predictably, the composite content of the agreement and, particularly, the inclusion of a chapter specifically dealing with investment protection and investment dispute settlement soon prompted the question of whether the EU’s new exclusive competence could be interpreted as encompassing both direct and indirect investment as well as investor-State dispute settlement mechanism (ISDS). Needless to say, the answer to this question has important practical implications. If the above policy fields and all other matters contained in the FTA were to fall within the scope of exclusive competence of the EU, then such agreements can be concluded as “EU-only” agreements. If these competences are shared, the agreement can be concluded either by the EU alone or as a mixed agreement, namely a treaty to which both the Member States and the Union are parties. Commentators usually distinguish this type of mixity (facultative mixity) from compulsory mixity, which applies when the agreement in question covers both matters falling within the exclusive competence of the European Union and matters falling within the exclusive competence of the Member States.