International Investment Agreements among China, Japan and Korea: From ‘Bilateral’ to ‘Trilateral’ – the Way toward a Better Protection for Foreign Investors
Derek Zhaoke Zhu
ABSTRACT: This paper analyses the Trilateral Investment Agreement (TIA), the Bilateral Investments Agreements (“BITs”) and the BIT programme concluded among China, Japan, and Korea. The relative weight of the outgoing direct investment among these three countries has continuously and sharply increased. Japanese and Korean BITs focus on seeking to liberalize as well as protect their overseas investment due partly to the relatively small domestic markets. China has largely embraced global norms of the treatment of foreign direct investment (FDI) but still takes a more defensive posture than Japan or Korea on the conclusion of BITs. While these three countries has taken an important, albeit symbolic, step for regionalism in deciding to conclude a trilateral investment agreement, BITs still play a very important role so far. This paper examines these three countries’ substantive clauses on the protection of FDI under BITs and the TIA. It conducts a comparative and qualitative research, an approach not seen in existing literature, on the investment treaty protections offered by three East Asian countries. This research would be useful for the further development of IIAs or FTAs among these countries, especially for China in light of its relative weaker investment protection.