looks like that works. Is this on? Can anybody hear me? Terrific, you know? I got to tell you when I when I was at CSIS and was a much less august predecessor to my good friend Scott Miller as the shoal chair, the digs were not as nice. I got to see an awful lot of friends who've knocked around this town for a while who remember the old CSIS where at this time of day you always felt like you were going down into a cavern down to like I don't know B32 or something like that to go to one of these meetings. So the nice thing is it's actually natural light now. Really, you know, we're not all like mushrooms like we once were. So anyway with that it's sort of a starting point. I'm delighted to be here and particularly for this program. My name is Grant Eldonis. I'm a senior advisor at CSIS and used to do a few things in the trade and investment arena. Today I usually describe myself as a blues artist and a grandfather because I spend most of my time. But I have the perspective of age which is what I want to bring to this topic. Twenty years ago I'm surprised to say I was a younger lawyer, I shouldn't say a young lawyer and I chaired a task force of the American Bar Association on multilateral investment agreements. And in that we made the case and I have to say this is to get a position out of the ABA you have to go through the trial lawyers, the section on environmental law, the section on labor law, the section on international, the whole sort of nine yards. So we worked our way to a consensus which was vigorously in support of not only multilateral investment agreements, bilateral investment agreements, but investor state. And the reason for that was that you could see then, just after the Uruguay round, just after the creation of the WHO, that one of the large gaps remaining in the architecture of international economic law was in fact with respect to investment and particularly with respect to investor state. And what struck me as I was thinking about this is that over the last 20 years what's happened in the global economy has actually emphasized the need to close this gap because the reality of how we compete, everyone competes in the global economy today is very different than it was 20 years ago.  In fact, the real goal has to be to remain a part of the diffusion of technology, the diffusion and the knowledge that allows us to remain at the technological frontier and produce high-paying jobs, all the growth that we want to see in the economy, and the stimulus that our growth provides to the rest of the world economy. To do that, the rules have to be things that guarantee a reward to both our firms and our workers in terms of their industry, their initiative and their innovation. And the investment rules and dispute settlement are part of that. That's one. Now in the last 10 years I've spent a lot more in my life where I started out when I was in the foreign service years ago which is working on development issues. And what's been fascinating about the last 10 years is what it's reinforced for me is that number one, the importance of institutions in the context of development, that in the absence of the right sort of institutions, very hard, very, very hard for a developing country, number one to grow, but equally important to allow itself to be a part of a growing global economy, to be able to attract investment, to be able to, frankly, to guarantee a reward to their own innovators going forward. So to do that they want to have an architecture that allows them to participate. And again, it struck me that closing the gap in terms of investment rules and a dispute settlement model that functions was very important. The critical thing we also know about development is that it depends on participating just as our firms have to in that flow, that diffusion of technology. And in the absence of those same rules that our firms large and small benefit from and need, there's no possibility of them closing the gap on the technological frontier. Our job is very hard to stay near it. Ironically, their job is much harder to close that gap, and the rules and dispute settlement are actually a critical part of it. So here's the irony, 20 years later, is that at the time that as the representative for the ABA and going and testifying it from Congress, I was making a very basic point about investor state, I'm surprised that we're still having a debate about it. Because the reality of investor state from our perspective is to guarantee no more than the Fifth Amendment to the Constitution already provides a foreign investor in our country. The irony is the obligation does not extend further than that which we already owe. And so the idea that we are stymied oftentimes in having a conversation about the clarity and importance of closing the gap is always surprising to me, particularly coming back to it after all these years, which is the main reason why when Scott asked, I was more than happy to say, love to come and have a conversation with you all. Certainly, we got a terrific set of panelists. Susan's great work, I think, is going to be helpful to everybody to inform that discussion. I know there's lots of people in the audience who have their own reasons for wanting to know more about how this works, what are the arguments, how does this all reflect the panels that we have and sort of the depth of experience is just remarkable. So my job is simply to put my shoulder to the wheel along with everybody else and turn it over to my fellow blocking tackle here. Scott Miller, thank you. Good morning and let me have a welcome to CSIS. I'm Scott Miller, I'm the Senior Advisor in the Shoal Chair in International Business. And we thank you very much for attending today and thank you, Grant, as both my predecessor and my inspiration. So it's always a delight to have you here. I want to welcome all the people who are watching at csa.org. The program is being webcast live and will be available after the program for viewing if you so choose. So in any case, our audience is both very, very, very satisfying in the room but there's more outside as well. So thank you. International investment agreements have become a key source of controversy and concern by many involved in trade and investment policy. Now there's no shortage of programming on this subject. In fact, yesterday I was pleased to have attended an excellent presentation at an OECD conference which focused on foreign investments contribution to growth and jobs, a very appropriate focus. But our focus is on investor-state dispute settlement, specifically the provision in bilateral investment treaties and international investment agreements that allows investors access to an arbitration mechanism with states over treaty breaches. ISDS or investor-state dispute settlement has been the subject of intense criticism and in many circles questions about its legitimacy as a policy tool. Today we are releasing a working paper that addresses this subject. The working paper will be available online. In fact, if you're here today and respond to the invitation, I think we're going to email it out to you. But at csa.org on the events page, you'll find a PDF copy of our paper. We're trying to kill fewer trees so we hope you'll accept the PDF file. Basically, we have conducted an empirical review of investor-state dispute settlement, starting with how it came to be such a relatively popular instrument over 2,400 bilateral treaties and investment agreements enforced worldwide. We want to make some observations about ISDS cases, both filed cases and completed cases, and some commentary on the expectations of both governments and investors. The report will be available, but let me launch our discussion today by giving you a brief summary of our findings. First, while ISDS as a whole is often portrayed as some out-of-control system, what we've concluded is, in fact, it's quite stable and predictable in both where the cases come from and how they proceed. The first thing we'd observe is it's awfully quiet in a lot of places. Of the 2,400 bilateral investment treaties and investment agreements enforced worldwide, since 1959, over 90 percent of those treaties have never had an investor dispute. So basically, for the most part, it's working fairly well. Second, while it is clear that investment disputes have risen in quantity over the last decade, we found that the increase in investment disputes is roughly proportional to the increase in foreign capital stock invested. So, yes, there are more cases, there are also more investors, and there is more investment, and those elements are in pretty direct proportion. When we looked at filed cases, we found some things that, frankly, we should have expected. First, that primarily the investors who participate in dispute settlement who file cases tend to come from large capital exporting economies and in relative proportion to the capital stock. For instance, the United States is responsible for 24 percent of global foreign direct investment capital stock and has filed, since the dawn of time, 22 percent of the cases. Europe, which has more than half of the bilateral investment treaties enforced, have a European party to them, Europe is responsible for 47 percent of global FDI stock, and then filed just over half the cases. So, again, not a surprise if you think about dispute settlement being in proportion to investment in the first place. Second, we were also not surprised to find that sectors which have a high level of state intervention tend to be the most prominent sectors where cases occur. So, if I told you that 40 percent of investors who participate in dispute settlement cases occurred in the oil, gas, mining, and electric power distribution sectors, it shouldn't be a surprise to anyone, and turns out it wasn't a particular surprise to us. Third, we found that respondent states tended to be associated with states with weak legal institutions. Argentina is the leading respondent state at 53 cases. Venezuela is number two at 36. So, you get the idea, both who files, what sectors they get filed in, and who the respondents are is probably what you'd predict from a starting point. When you look more in more detail at completed cases, the picture also becomes quite consistent. First, what we learned from looking at all completed cases where we could find evidence that about a third of cases, the panel does not reach a decision. A third of cases are settled by the parties before the panel arrives at a decision. Second, for the cases that proceed to a panel decision, governments tend to win about twice as often as states. So, from an investor's standpoint, it's actually much worse than a coin toss in terms of who prevails in the dispute settlement process. And when the investor does win, awards tend to be a very small fraction of the claim, on average, less than 10 cents on the dollar. Finally, our review would lead us to conclude that many of the claims being made and the articles being written about a investor's dispute settlement are somewhat overblown. I did a pretend word cloud. How can you use the web to create a word cloud? And the topic sentence would have been, ISDS cases gives special rights to big companies to overturn regulations. Well, frankly, as Grant pointed out, the rights that are available to investors in the treaty obligations are not special. They're, in fact, quite ordinary. They are the basic rights accorded to all persons in the United States through the Fifth Amendment, Takings Clause. They are the basic rights provided by the European Charter and the United Nations Charter of Rights and Freedom. So these are very basic rights about property and access to property, and the right to fair adjudication, and the right to reasonable fair and equitable treatment before the law. Second, the notion of overturning regulations is somewhat bizarre when you consider the actual text of treaties, which limit arbitral panels to making awards which are compensation or restitution of property. And we could frankly not find a case where a panel had actually given an award that constituted a change in any regulation. In fact, most cases aren't about regulations themselves, rather how they're applied. Panels can only award compensation. There have been a case or two that we found where, as part of the settlement, when the case was settled before the arbitral panel reached a decision, that a regulation found to be, say, discriminatory was changed. But actually, no panel ever forced that, nor, frankly, could they, given the terms of the treaty. Finally, our biggest surprise was the notion that investor-state dispute settlement is about big companies. We looked at all the American investors who have filed cases, and we were surprised to learn that over half of them would qualify for the Commerce Department's status of small or medium-sized enterprise, that is fewer than 500 employees. So quite a different picture and one that I hope we'll be able to talk more about today. Thanks very much to Greg Hicks, who is a State Department visiting fellow at CSIS, who has had a long experience in the Economic Bureau of the State Department on this, who is our lead researcher. You'll get a chance to ask questions for Greg and I in a few moments, but we'd like to first turn to our keynote address by Professor Susan Frank. Susan Frank is a professor of law at Washington and Lee University. But more importantly, she is one of the leading investigators into investor-state dispute settlement, investor arbitration, and has done some of what I consider the most impressive empirical research on investment arbitration. So please welcome Professor Susan Frank. Wonderful. Well, thank you for having me here today.  Somewhat unusual for law professors. My own research was prompted by claims made by arbitration elites in 2005 about the state of international investment law, and I was not quite sure whether or not the claims were representative. So I essentially imparted on a journey to become the factcheck.org of investor-state dispute settlement to see whether or not the claims I was hearing from the arbitrators, from states, and to be blunt about it, even myself in my early scholarship, were actually correct. I have to confess that I was originally trained as a psychologist, and part of this training made me did question, am I consuming and receiving information in a way that is balanced, that is appropriate, and that pushes beyond an emotive reaction, which I may have, to look at actual quantitative data and reality test my own assumptions. So I do fully appreciate that we can have emotive responses, but I would rather be right. And this was essentially what spawned my approach, which I call an evidence-based approach, to international investment law. Some of my deep mentors always encouraged me to think of assessments, assertions, as hypotheses, hypotheses to be tested. And I hope that when we think about narratives related to international investment law, that we can use that approach to help us understand the system, because the narratives could very well be correct. And it was, it's always a delight when your childhood heroes, mine were Kahneman and Tversky, because that's the kind of nerd that I am, actually become front and center in books like Thinking Fast and Slow. It is entirely correct that the narratives that we see, the things that we read, could in fact be correct, but again, we need to test this against the logic and the actual data to provide a framework. I'm also the daughter of a farmer and an engineer, which means I want to create strategies that don't create more problems. I would rather create tailored, normative reforms that generate tailored, normative, valuable solutions. So what does this mean for you and for me in terms of the work that I have undertaken to understand this area of private international law? It means that I need evidence. Before I make claims, before I make assertions, I need data. My data comes from a very large now set of data sets related to public awards. That will inevitably mean that there are some case selection effects, and I'm absolutely happy to talk about those and let my inner-quant nerd come to the fore. I just need to flag this now, because one of the things that Scott said is a third of the cases, for example, get settled. So if, for example, they're settled prior to the making of a public award, they will be excluded. So these are the sorts of caveats that I must make to make sure that you appreciate it.  But we've been very, very, very rigorous about this because I do fully appreciate the high stakes involved, and I'm happy to talk to you about it. But the data set is massive. It's more than, oh gosh, I think 150,000 pieces of individualized information that has come from the cases. But we now have a total of over 272 public awards, as at the end of 2012, with 159 different final awards, and these become the basis of the information that I'm going to provide you with today. How do you start with factcheck.org? You start with an assessment or an assertion or a belief or a hypothesis. There are different hypotheses in this area. One hypothesis is that investors largely win, and there is a pro investor bias in the results. The counter narrative is that that is not correct, and in fact sometimes they win, sometimes they lose, and then sometimes you even hear things on the other side. Well, what do the data say? Because these are very serious claims. I also teach civil procedure and the idea that any system that is rule of law based and creates unfair outcomes does trouble me greatly. So what do the data say? The data say that investors win, but also that states win. The state win rate represents the red bar. The data now actually show that it is not just that states win. It is that states win reliably more than investors. The ratio in my own study, which apparently is somewhat similar to Scott's, it's about a two to three ratio. So for every two states investors win, states win three. And now that we have 144 final awards that we can analyze in connection with this, like just the green bar and just the red bar, that difference is actually statistically meaningful. I get to say that for the first time, it does make me a little bit nervous, but I've spent a lot of time talking with psychologists and other quantitative scholars to make sure I'm correct on that point. I guess in a way this slightly surprised me because my earlier research that ended in 2006 showed almost exactly the same thing, the same pattern, but in those days the dataset was smaller and I could not say it was reliably different. It would have been quite wrong of me to do so, but the pattern is the same. And so I said to my husband, I said, it's the same. I've done something wrong. And he reminded me as a scientist that all I can do is A, repeat what the data say, and B, suggest that if it is this stable over time with nearly a 300% increase in the caseload, perhaps indeed this is actually the way the system works, and that states do tend to win more often than others. Because of the concerns about what it means to have a pro-investor bias in the system, I've talked with other people about this. I was fortunate enough to have a conversation with Ted Eisenberg before he passed away last year. He's one of the leaders in empirical legal scholarship in the world, I say is, but he's passed now. That's hard for me, but one of the things he said to me was, Susan, if you look at empirical research in other contexts against states by people, usually states win more anyway. So this in a way makes me wonder with the new data whether or not investor state dispute settlement is just rather a very typical phenomena in dispute settlement more generally. It just happens to be that here we're talking about investors in states and the stakes are high, but if it's happening in, for example, Bivens claims or whistleblower claims, the people making the whistleblowing claims rarely win. Keytam litigation involving state sovereignty, that's another situation where states are winning and the people bringing the claims aren't winning as much. This may be just a normal phenomena when you have a state as a respondent. So I would suggest that that's a way of potentially thinking about these particular results. But winning and losing, this being the difference between I got a zero award and I got a cent or more, is a very rough, binary way to be thinking about outcomes. Outcomes are also a function of how much. So there have, for example, been, whoops, I've already gone a little too far. And you've now watched, this is a very interesting approach. You've, you have now see, you've previewed it, so now I feel like the cat is out of the bag, but let's get to it. Part of what I was looking at was actually do we have large claims and large awards? And again, this is, I think, a very important claim to evaluate. But what I thought was most interesting was the framework, if you will, the visual image that you get from looking at the difference between an ask and a get is fairly substantial, and it was about as substantial as it was in my earlier research. The difference between the mean amount claimed and the mean amount awarded is 606 million, at least as at the end of 2012. So this meant on average, for all cases, right, including the wins and the loss, for all cases, that means investors were getting 18 cents on the dollar or two cents on the median. But again, that includes those cases where respondents dates one, and again, that was a pretty large chunk of the data set, so it's important to exclude those because otherwise the zeros will pull the mean towards the bottom. So it's important to also take a look at what's going on in terms of the raw amounts awarded for the small subset of cases, about the one-third of cases, where investors did win. You see a very similar pattern, namely there's a difference between an ask and a get, and here the means and medians for an average and median amount awarded are actually much similar. There are around 31 to 32 cents on the dollar, so about a third of what you get overall, but there's still a disjunction. One of the things this says to me is that the arbitral tribunals are actually weeding out some of the unmeritorious claims. In other words, they're doing the job that they're supposed to be doing, making sure that people with claims that don't work are actually excluded. But I want to give you another sense of it, and for those e-lawn, econ, or polysine nerds, you may appreciate something that's called a box plot that I'm about to put up. But if you haven't seen one of these before, I'm going to walk you through it.  It is the median bar. The first chart is going to be the amounts claimed, and it will give you a dollar-for-dollar sense of the difference between amounts awarded. So you'll see on the amounts claimed graph, there's a very large cluster, all under $300 million.  The professor goes to do a little action now. Data, in terms of your request, this is $100 million. Walk yourself over from the median claim. Go to the median award, and you'll find this is maybe 70%, 75% or higher of all claims. The median, here's zero, here's the median amount awarded. This is the subset for only those cases we're investors with. But these are broad data. Part of it is also a function of, well, we always like to think that there's an explanatory explanation for this broad data. My psychology professor, who also taught me in quantitative methods, like to say we lust for cause. We want to understand why these things happen in the manner in which they do. So I decided to look, oh gosh, it's done it again. I decided to not just look at these raw descriptive data that I provided earlier, but also look at how those outcomes varied according to other variables. But outcome is really tricky, because it seems to me, and again this is probably the psychologist talking, it seems to me that it doesn't matter if you're a plaintiff or pardon me, an investor or respondent, nobody does seem to be happy. So you can be an investor who wins cash and still decide that you're unhappy with the outcome. You can be a state who is found to have no breach and in fact no violation of international law, no amount awarded against you, and you can also be very unhappy. So in order to provide some clarity about what outcomes mean, there are at least three variables that I looked at. One is the raw win or lose, did I get one cent or more awarded, or did I get nothing? One is the amount awarded, the sheer dollar value, and of course always adjusted for inflation. And then of course the investor's success rate, namely the respective difference between what you ask for and what you get. And I looked at a couple of different variables. There are many more that I could talk about, but there are a couple that are near injured in my heart that I personally have worried a great deal about, and I'm going to walk you through some of those today. One of them relates to the development background of the States. This really does matter, because if investor state dispute settlement is unfairly tilted in a way that is disadvantaged in developing countries when they're trying to evolve, that does concern me. So one of the things that I did was I looked at outcomes, all of those outcomes, as a function of a respondent state's development background using a variety of different metrics. I figured I have one idea, but other people might have others of what it means to be developed. So I looked at the OECD classification of the respondent state. I looked at how the World Bank classified the respondent date at the time of the award. I looked at how the United Nations Development Program's conception of human development index might actually affect these things. And I looked at outcomes for respondent states controlling for the effect of democracy to see if there was some kind of link between outcomes and respondent states. The answer was I couldn't find any kind of a difference. Every single time, it doesn't mean it's not there, that's science, I have to acknowledge that, but every single time I looked, I ran it nine different ways and I've showed you the printouts on the slides. The top numbers are the R values for the statistics geeks out there, and the second layers are the P values, and the third layer is the N. The R values are all under 0.10. For those of you who understand that, that means that is almost less than statistically small. That is like finding a needle in a haystack. If you want to make sure that there is a needle in the haystack, you'll need over 700 completed arbitration awards. This is potentially, if it's there, it is a very small effect, and none of it was statistically significant. So even though there are lots of cases against countries that we may have deep emotive sympathy for, it does suggest to me that once you control for democracy levels, there doesn't seem to be an unfair balance in terms of the outcome, or at least this is part of the evidence that would cast doubt on those concerns. Those are legitimate concerns, but if I can't find it and I'm looking, and I'm looking, and I'm looking, and I'm looking at the R values and the P values, which should be indicators of it's important or it's not, and I'm finding something very small, that's something that I pay attention to. I've been doing this kind of research since 2006, and when I can't find anything, it's very odd, but you keep looking. That's the background on respondent states, but it also matters as part of the debate who the investors are. And this is actually very hard work to do, because figuring out who the investors are is not that easy. So one of the things that I did was I created one measure of looking at investors, and the first measure was, are you a human being? Is someone in your case a publicly listed entity?  And then I started to look at outcomes as a function of who the investors were and tried to see if there was a difference. That was one way. So let's then look a little bit about the breakdown. If you are a human being, your ratio of wins to losses is about 50-50. Human beings are doing pretty good. If you are a publicly held entity or have at least one publicly held entity bringing the case, you're kind of in a 50-50. The historical rule, despite the fact that we can now say that there's a bit of a pro-state bias, the historical rule is under the priest-clined model that all things being equal, the reason you bring to case to a court or tribunal is because it could go either way, because it's a tough case. So you see that with the public corporations. You see that with the individuals, the human beings bringing cases. But you see where you don't see that? The holy private corporations. In other words, I think that this is maybe more of a match for your small and medium, I did it again, enterprise model. And that to me, that is very interesting because there the states are winning twice often as the investors are. Publicly held, publicly listed and traded on the stock exchange, not state owned. We were very careful about this. Like I said, it's very hard to do this work. And at one point, the OECD actually tried and then stopped because it is so difficult. But I have a very good library at Washington and Lee and Bloomberg has a great data set and we are very, very, very persistent. So we try hard to do that. But again, this is one way of thinking about who the investors are. There's another way of thinking about it, which is you're a Financial Times entity or not. And this is why I say thinking about investor identity is complex. Because for the first time that I was able to see, I actually did find a statistically meaningful difference. Namely that the Financial Times 500 entities did win more often than the government, at least as compared to the entities that didn't have a Financial Times 500 entity listed in the case. This is the only evidence that I have been able to see that identifies pro investor bias. But I wanted to flag two things that I think are important. The first is that the Financial Times 500 entities are roughly 10% of the overall case load. So this is not a huge proportion of the cases that are actually being brought.  That's number one. Number two, one of the things that Ted Eisenberg also talked to me when I was speaking with him about my research is that he said there's probably a case selection effect here. Namely, the people are bringing the cases and they're being very careful about it. And so perhaps all they are doing is they're making a better bet in terms of knowing that they should bring the claim forward at all. If you will, they have a more sophisticated screening methodology and they're more careful about deciding when, where, and how to bring the claims. And I thought, you know, that will shake out over time, but I thought it was an interesting perspective. And the reason why I think it is particularly interesting, and I'm going to skip ahead slightly just a bit, is because I want to show you something else about these Financial Times entities in terms of what happens in terms of relative success of the investors. I can get it to go. Because once you look at the relative success of investors in the small subset of cases where investors actually did win, the relative success rate is roughly equivalent and it is in terms of the descriptive data and it's not statistically meaningful. So for example, the relative success of a Financial Times 500 entity is roughly 38 percent, 37.7. And for the non-Financial Times investors who are bringing cases, it's about 34. So 3 percent on the margins when you've got those kind of standard deviations, it's not necessarily appropriate to say that there's a statistically meaningful difference. And look at the R value. It's again under 0.10. But it is complex because the other thing that I do need to show you is who the investors are, the people. And it is going kind of wild again. Sorry. If I can get it to go forward, this is very, very interesting indeed. Okay. And it's gone too far. Can I just go back one? Just one. Just one. Sorry. I love technology but sometimes it really gets you. Ah, bless. Okay. This is the group of all cases again and it gets even more extreme when you look at the subset of investors who have actually won and are satisfied. Look at the difference between who's having the highest level of success rate. Cases brought by human beings have the highest level of success rate. And when you actually then focus on the subset, the investor's success level goes up to a roughly, I think that it is, let me just make sure I've got the right number, it goes up to roughly 45 percent. And in fact, that then becomes a meaningful distinction. In other words, human beings bringing cases do better than private corporations. That actually was very interesting to me because it means the biggest predictive variable is whether or not your investor is a bunch of humans or a single human being. But it shows that 30 percent of individuals or rather individuals get roughly about 30 percent of what they ask for in all the cases as opposed to public corporations, at least one public corporation a little bit lower. And then private corporations getting 10 percent of what they ask for. And again, this is partially a function of the fact that so many of those private entities were not recovering at all. So it's a very important story about what's going on with outcomes. Yes, states are winning more. Generally, they're winning more. And generally investors, when they do win, are not winning that much, roughly about a third. It says to me that maybe we should care less about who the respondents are and more about creating narrowly tailored normative solutions to address concerns that we have about who are bringing the claims.  But there are opportunities for normative reform. That's outcome. How long does it take and how much does it cost? Those are two of the best questions I would get when I practiced in DC and in London. In terms of how long, it can be quite a long time. Three and a half years is about the average time. Short times under a year, 10 months, long times can go on quite a long time. And it may be because parties are trying to engage in settlements or other kinds of alternative dispute resolution. So there is quite a long time that does go on with these disputes. And how much does it cost?  It usually costs for both parties a little bit under 10 million. I started this research because I was very interested in the costs. In part because in one of my very first articles I said we didn't have to worry about unmeritorious claims because cost shifting would occur. And then I actually wondered am I right about that? And it turns out that actually I was wrong. And this is why I prefer data because data will tell you when you are wrong. But you do see that the party's legal costs are actually quite large. And there is a suggestion in the data that actually the costs have been increasing over time, which wouldn't surprise one if the legal teams were getting larger over time as well. In terms of tribunals, tribunals are actually roughly fairly inexpensive and their cost has not changed very much over time. It used to be that they were around $600,000 that wasn't adjusted for inflation, but now it's about $800,000-ish. And those tend to get split in roughly equal ways. And one of the things that is not in this presentation in terms of a slide, but I can and should flag to you because this is another one of those times when I was wrong. Some people have historically said that there's a one-way cost-shifting rule that operates only in favor of investors. And I thought that that was wrong because I couldn't find any data to support that. But in the new generation of data, you actually do find that. So two things then happen. More often than not, there is no cost-shifting and international arbitration. So each party bears its own costs. But you can't predict that. And now I will tell you why. Because there is a one-way cost-shifting rule that operates in favor of investors overall. So what that means is the reason we don't see cost-shifting is because the states are winning and then there's no cost-shifting. But when the investors win in that small subset, guess what happens? There is cost-shifting that is occurring in favor of the investors, which then if you're a state and you're thinking about how do we change the rules of the game, although Judge Schwebel may disagree with me as a matter of international law, one may suggest that states could create a cost-shifting rule that operated in their favor if they wished to create the right set of incentives just to thought. Slightly controversial, I recognize. But what does this mean overall in terms of the dispute resolution calculus for investor-state dispute settlement? It means that the cost, the damages that are being claimed are rather large. But it also means that the amounts awarded are much smaller. And then with pre-award interest, at least on the basis of the data I have, which I must admit is incredibly vague because tribunals don't put this information in their awards with the degree that they should, in my view. That means that it does suggest that the awards of interest are $7 million. Think about that average award, $16 average interest rate, $7 million. And it means then that the cost of the lawyers and the tribunal is about $10 million. And one wonders what the value proposition is for investors. So it would suggest to me that if investors actually want this, they may wish, you know, get what they wish for, but they may do so at their peril. But it would then suggest that it is actually an important tool for them to use if it is available. So my overall synthesis before I wrap up, and apparently the screen is done for me, is that generally I think the investment treaty arbitration is maturing like other innovations in domestic legal settings, in international law, things evolve over time. That's unsurprising. And there are elements about the system that are useful, weeding out unmeritorious claims, being careful about how you do things. But some elements are of more concern related to, for example, costs, interests, cost-shiftings, their areas for consideration. But what I'd like to suggest today to the policy community is that if there are concerns that we have, and there are some concerns to address, then we can create targeted reforms rather than blunt reforms. To use a medical analogy, if you have a headache, you don't get a triple bypass. You maybe think first whether or not you should take some aspirin and then perhaps get some diet and exercise. And over time, with targeted reforms, you may feel better without needing something more invasive. Thank you, Susan. If you're like me, I'm sitting here, I'm reminded of a far-side cartoon, which is of a classroom, and there was a young man holding up his hand and saying, Professor, may I be excused? My brain is full. Thank you. That was awesome rendition of a lot of decades of research now. So pretty close to it. So thank you. We'd like to open up for questions, if there are any. Just so you know, there are three rules for questions here at CSIS. First, wait for the microphone because of our online audience. Second, introduce yourself and your state, your organization. Third, make sure your question is in the form of a question. So with that, yes, sir. Thank you. Marty Weiss with the U.S. Congressional Research Service. So one thing we didn't talk about that much this morning is variability among the treaties. You talked about doing targeted reforms for investor-state disputes element. Given the fact that with thousands of treaties, different rules and ad hoc created panels for each disputes element, how do you see dealing with inconsistencies within rewards? A lot of the concerns you've heard about exit reform over the past couple years about how can we make these awards more legitimate? And then if you can talk about a little bit moving beyond that, as we move in towards mega regional type agreements where we're combining trade and investment remedies in the same agreement, how do you see reconciling kind of public law issues with trade with the private dispute settlement in the investment treaty site? And how when you could have various disputes such as the Australia cigarette case, which could legitimately be brought under either, you know, under trade or investment dispute settlement. So how do you see that system kind of building out forward? Well, I am but a humble law professor in Lexington, Virginia. So I'll do what I can to answer from my own research, but I will flag that one of my first articles was about what I call the legitimacy crisis in international investment law, in part because back in 2004, I had been involved in at a time when there was, well, probably 20 or fewer cases, I had been involved in three that had had inconsistent, if you will, legal reasoning, right? So I had been involved in the Lauder and the CME cases, working with the tribunal in one of them. I had been involved in the SGS cases in connection with my work in Australia, work in London. And I thought, how much inconsistency can one farm girl from Iowa take? And I then wrote an article identifying my own concerns. So the concerns that you're talking about inconsistencies within the case law, these are things that are real and they're important. So my response is actually the response that I gave in that article back in 2000, and it was published in 2005. So nearly 10 years ago, which is to the extent that you're trying to deal with doctrinal inconsistencies across treaties, there is a real value to be considered in creating some kind of a public appellate mechanism to redress those concerns. Because different treaties have different textual obligations, and I respect that because that is an exercise of sovereignty. Different states may have different needs and different priorities, and those sovereign choices in how disputes are crafted in treaties or not, and grants of rights, whether they be trade or investment related, are very important decisions by states. There's no doubt about that. But to the extent that you can have one holistic appellate body that could, for example, identify what is similar and identify what is different and begin to create a set of consistent jurisprudence, that would personally help me tremendously. And to be honest, one of the concerns that I've always had in my own research is, how do you know what's the legally correct outcome? So I can control, for example, for something related to legal correctness. I am not able to do that without an appellate body providing me clear guidance about what the legally correct outcome always is or should be. With that, I could then control for that, and then you could see much better variation within the statistical analysis. So in that sense, I think there are solutions that are structural solutions that could potentially provide safeguards to the arbitration of process, so that it could actually function effectively and retain the value that it always has. Hi, Nate Graham with Procter & Gamble. Thank you for the presentation. I think that's really a helpful way for all of us to think about these issues. Question on the third of the cases that go to settlement after the process is initiated. Does your research give you any insight into the value of those settlements or whether the state or the investor is more likely to concede in those settled cases? This is a good point as well. There's two things I want to flag with that. The data that suggests about a third of the cases settled comes from potentially three places, apparently the research that CSIS has done, to the data from ICSID, and of course ICSID data actually includes investor state disputes under treaties and investor state disputes under national law. So you've got to be careful because ICSID data actually conflates two different things. We're talking today about international law, but some of their data is about domestic law disputes. But they've got a pot of it. And also I believe that Michael Weibull has some research that shows the same thing, namely that about a third of the disputes settled, but I think he also uses the ICSID data to do that. But what that says to me, and research by Michael Riesman has also looked at this. He's got an article in the ICSID review called Arbitration and ADR Married but Beth's Living Separately. I will take issue with that, and we have talked about that in the past. But the third of those cases, it does seem to be consistent across people's research. So that's very interesting in and of itself. My research only shows about 10% of cases settling, but that's because I'm coding them after there is another document. For example, a jurisdictional award, and then someone settles or discontinues, which says to me that settlement can occur theoretically at any time in the dispute resolution process, not necessarily just at the front end. And at my core, I'm probably more of an alternative dispute resolution scholar than an arbitration junkie. This is the area of my research, but I want to encourage states or investors or whoever when they're thinking about dispute settlement to think more broadly about the methodologies that could solve those problems. For example, mediation. If there were very clear mediation rules within the text of investment treaties, you could potentially prevent disputes from going to arbitration. And then we could know more about why those cases settle. What I can tell you about when the cases settle is going to be highly anecdotal, and I'm not going to be able to give you a comprehensive approach. But I can tell you that there have been cases that I've seen where they have settled after a jurisdictional ruling. There have been cases where, for example, they decide to renegotiate the commercial terms. There have actually been, there was one very interesting settlement. I'll never forget this one, although it did spawn later arbitration. Lemir versus Ukraine. The very first case in Lemir created a settlement agreement where there was actually no money that traded hands at all. The settlement agreement was relating to opening up trading possibilities, not for the radio station at issue, but the Oksana Bayoul beauty salon that the investor actually really wanted to market. And I thought that was brilliant because it showed me that states can actually be very creative about finding value, and if you will, retaining sovereignty in the settlement of the dispute. Nothing in your research that people could point to to say people, investors bring the dispute and the state after looking at it or there's a jurisdictional word decides why we better settle this or else it could be worse for us. In other words, could skeptics of ISDS point to settlements as a way to say that investors are pushing this too far that states are more likely to cave in a settlement scenario? I'm not sure about that because not all states do settle it. I think sometimes it's actually very difficult. Part of the reason I want to flag this is I worked for a semester. I had a great privilege of working with the United Nations trade at Unktat and Geneva, the trade and development conference. And I had a chance to meet a lot of stakeholders, namely states from different parts of the world, usually the developing world. And I would hear their stories. And again, this is just it's an anecdote and it may not be representative. But I saw people who really wanted to work hard to create alternative dispute resolution, not because they wanted to cave, but because they were trying to build capacity within their home jurisdictions because they knew that there would be a follow on effect related to the development of international institutions that would facilitate greater trade and commerce abroad. So to the extent that settlement is a bad thing, I mean you can argue that, but I would think that developing the capacity to manage conflict within developing countries actually has huge potential value, both for the state itself and also for the investors who may come to the state later on. Yeah, we just added the best data sources to probably exit. And it's really the evidence is very thin about why cases settle. So it was very difficult. We could tell which cases settled, but in terms of drawing a conclusion about why they settled or under what terms they settled, it's really kind of murky. The one thing I would add just as a piece of perspective is that when you look at this as a whole, dispute settlement on investment treaties looks a lot like complex civil litigation. That firms may enter into and in complex civil litigation, they're about it, they're expensive, they're time consuming, but they also tend to settle at a fairly reasonable rate and usually settlements are disclosed. So it's just, it's one of the things that is, I think, consistent with what Susan has said about how this fits into the broad scope of international law. And I also do want to flag that I think some developing states in particular find it very difficult to settle because they don't necessarily have the settlement authority or indeed the national reserves that are allocated to these sorts of things. So it can actually be very, very challenging. Again, this is why capacity building related to investor state dispute settlement and mediation and conflict management and conflict prevention can be so important because you can create internal protocols for thinking about how do we want to manage our government policy? That's got to be useful to any state. Yes, sir. Thank you very much for that excellent presentation and the clarity with which you expressed yourself. Could you introduce yourself and your organization? I'm Bob Bastin with the Georgetown Center for Business and Public Policy. But my question is whether you have had a chance to examine the text of the Canadian-European trade agreement which I see you smiling, which contains some modifications in the investment chapter, which we understand are designed to respond to the clamor, the concern of European stakeholders and which modify to the distress of some American experts, modify or attempt to define terms like, I think, fair and equitable as one, that create new problems. So I'm just asking whether you've had a chance to take a look at that and what your thoughts might be. I've looked at parts of it. My response would be that actually that's the thing that troubled me personally, but I would say this given my last comment, was that at one point there had actually been a protocol in the draft treaty for the settlement of disputes related to investor state mediation. And my understanding is that that is no longer part of the agreement. So the idea that it was introduced but then it hasn't gone anywhere, it's a lost opportunity. In my view, that actually is something that I would be much more interested in. As a policy guy, not a researcher, I would say that there tends to be a reaction when in the United States we negotiated some very strong bilateral investment treaties and included very strong provisions in the NAFTA as the first comprehensive agreement and we're very surprised that we had cases filed against us. Okay. And part of that surprise, that didn't just happen in NAFTA by the way. That happened in WTO dispute settlement as well, where members of Congress advocated for years for a binding dispute settlement because the old non-binding GATT frustrated them to no end. Those same members were often quite surprised to find us on the receiving end of say the Venezuelan reformulated gas case where Venezuela, Plucky Venezuela walks into the WTO files a case against the United States and wins. It's like how could this happen? So that kind of shock happens and I would argue as somebody who participated in the 2004 model bit review process that there was substantial defensive concern on the part of the U.S. government that was reflected in some of the changes in the treaty between the 2004 model bit and its predecessor. I think to, you know, Canada as Greg and I found is one of the leading, is the leading respondent of OECD, among OECD members. Canada has more cases filed against it than any other member of the OECD and so I'm speculating here, but my guess is one of the things that may be going on there is some defensive interests becoming more prominent in the debates within government. So I think that's going to happen. I think it's going to settle out now. I will credit in the United States while we did make some changes in the model bit which did respond to domestic defensive concerns, I should say. Also there were some changes made that were very important from a public interest standpoint in terms of transparency and being able to eliminate privileged cases and things like that. So there were some substantive changes but those all changes were responsive to kind of what happened and the political surprises associated with the NAFTA. So I think that's common in our public policy debates and probably a healthy means. Let me switch sides here to on this side. Yes, Grant. Thank you. Sorry, a comment not a question in response to the earlier question about the settlement issue and whether or not governments are cowed into settling. And I have to say my experience first as an international lawyer litigating under these rules and then as a government official and more recently as an arbitrator, the risk perception is just the opposite from a government official's perspective. The risk always leads you to go ahead with the litigation. There's any question because that's the safe political position frankly. And the benchmark and I'm glad you mentioned it, Scott, is WTO litigation. You see this constant appellate process working because no government can be satisfied with the panel determination so they necessarily appeal anything that is even remotely controversial at a political level to the appellate body. Indeed oftentimes compelling the appellate body to rule in areas where there is no law based on what the negotiators originally did. This model is very different in the sense that there is law. It's the law of the case, the law of the agreement and it's the law that is designed under the treaty. So ironically it's a safer system than WTO but the same risk is there. The government generally will litigate if there's any perception of risk. I want to just flag two things. There's some wonderful political scientists who wrote about this and they call it domestic political cover. Todd Alley, he was, I believe he's just Todd Alley, he's at Maryland or he's just moved to George Washington but he's written about that and that's very interesting. The second thing I wanted to flag is that if you are a fan of Kahneman and Tversky and their prospect theory at all, you will understand that a state will view this as a loss and so as a matter of prospect theory it always makes sense to take the gamble if you're in one of these situations where it's essentially high risk, right? Whether it's a financial risk or a political risk, it's a high risk situation, you're more willing to roll the dice. I mean that's the way it works. Thank you. I'm Dan O'Flaherty with the National Foreign Trade Council. Given the findings that you've presented today politically, how do you explain the pushback against investor state in Europe and in a place like South Africa which Grant said that developing countries like to have institutionalized mechanisms and they are allowing I think six of their bilateral investment trees to lapse on this issue? I would have to speak to that probably as a psychologist first so again my bias is that it's going to be a psychological viewpoint so please take that with a grain of salt but to me it's largely because of cognition and cognitive illusions. What do I mean by that? Well there's a little thing called primacy. The primacy effect is that you remember the first thing that you get so if you see a 600 million dollar claim on your desk that's what you see that's what you remember. There's also a little thing called negativity biases. The negativity biases is that you remember negative things that you hear about. They're easier to recall. They then become available. Those get affected by the availability heuristic and then suddenly you've gotten availability cascade and you start to think that they're very prevalent when in fact they're not. There's also something then called a recency bias namely you hear something more recently like the Eucos case. Oh that's a very large award oh my goodness what's going on and then you start to think that these cases are normal and relevant and quite prevalent so you start to get if you will kind of the perfect storm of all of these cognitive illusions hitting you and forming policy even when they don't necessarily reflect the statistical base rates. Statistical base rates are very hard to absorb. I mean they are I mean it's much easier to remember one poignant story. How do charities get people to give? They tell the story of one orphan hurt by tsunami rather than talking about the overall statistical information because you respond emotively to the story. I would actually target it to the advocacy that is done for trade agreements. Having been an advocate for trade agreements in a previous life I think trade people are very good about talking about trade agreements and not very good about talking about investment okay. The Washington community is pretty skilled at talking issues of market access and issues of trade remedies and issues of dispute settlement in trade agreements. What we've done though is we've stuck investment treaties inside of trade agreements which share some language on occasion but mean different things. I mean fair and equitable means different things. Discrimination means different things in investment agreements that it means in the rest of the of that trade agreement okay. And my sense is and this was some practice after you know there was a big hub up around the time of trade promotion authority 12 years ago dealing with NAFTA cases and I found my friends in the lobbying community could make a good case for NAFTA trade rules but basically started to tie their loafers as soon as somebody mentioned one of the NAFTA chapter 11 cases and they kept tying them until the screaming stopped okay. So I think we as the pro trade pro investment community I think need to do a better job of sort of characterizing what's really going on here and we need to better understand that these are different things okay. A trade dispute gets resolved in a prospective manner. Somebody corrects a tariff, somebody corrects a rule okay and it happens it covers a broad class of trade a whole tariff line. An investment dispute is about an enterprise okay. It has no perspective remedy. The only remedy is compensation or restitution of property. It's an entirely different enterprise and we've jammed them together in a political document and we these comprehensive broad based treaties have a trade agreements have a lot of things to talk about. So I think you know I would encourage my fellow lobbyists to former colleagues to actually try to get better at understanding what the differences are and move it ahead but it's a tough one. I have time for one more question yes. Kim Elliott with the Center for Global Development and I want to get Greg to weigh in here on this issue of the settled cases. We don't know what the content of the settlement but do the respondents and claimants presumably we have some information about who they are. Do they look at all different from the other cases? Actually they don't. I mean they pretty much conform to the full range of participants and in some cases we do know the contents of settlements. In some cases we don't. There's some of the major settlements out there, Ethel versus Canada, SD Meyers or the first Battenfall dispute and so but in general again there's an incentive among both investors and states towards confidentiality. Neither really wants all of this information out in the public. States understand there's reputational risk associated with this just as companies understand that there's reputational risk and that's one of the reasons why historically the inventors of this system gravitated towards finding arbitration because it had had so much success in settling commercial disputes. Thank you Ed. As the moderator I always have to apologize for cutting off a discussion just when it's getting good. I'm the guy who takes away the punch ball when the party starts to pick up so in any case but let's now move to our second panel but first again let's recognize Dr. Prankin for his contribution. Let me invite the panelists very quick scene change here and we'll get right back to it. To build out the practical side of the experience with investor state dispute settlement I've invited three real experts on a practical basis to discuss the operation and effects of investor state dispute settlement each one bringing a partially unique perspective. They're all deeply invested in investor state dispute settlement have a long experience but they each provide different roles. You'll see the graphical information in the materials you receive coming in but Ambassador John Verneau who now is in private practice but is here because he was a negotiator of these treaties as general counsel of USTR and as deputy United States trade representative. So he'll speak from the point of view of the negotiator of the government and the public interest that's considered as these treaties are being negotiated. Linda Dempsey is vice president of the National Association of Manufacturers heads of their international division. Linda is a long time she was both in private practice and then as a staff to Senator Moynihan on the Senate Finance Committee and in previous in the subsequent time as an advocate is a real expert in the area but will represent the views of the investor as they contemplate how to treat a what they believe is a treaty breach. Finally, Stanemare is here who's a deeply experienced attorney in international law represents clients in dispute settlement cases but most importantly is a frequent arbitrator and Stanemare is here basically to share the experience when the state and the investor come together the arbitrator is an unusual and important situation so Stanemare will talk about that. I'd like each panelist to offer a few minutes of comments and then we'll turn to each other into the audience so thank you. John. Thank you Scott and thank you to CSIS for hosting this. As noted as Scott you mentioned earlier a number of organizations around town and elsewhere are hosting these events and I think it's critically important that we raise the level of discussion and understanding of these of investor state because they they're not well known the principles behind them and I and I hope to speak to those right now from a government perspective. I first want to assure you that there'll be no math in my presentation. Professor Frank thank you for that great presentation. I was an English major. I'm good for the month now. I'm going to regress back to my own mean which is no math. I'm going to talk about principles and whenever I can I whenever I can start my remarks by referencing the founding fathers I do because they had great great wisdom. In 1796 John Adams after negotiating the United States the first treaty on friendship commerce and navigation with France said this about protecting alien property by rules of international law. There is no principle of law of nations more firmly established than that which entitles the property of strangers to protection by the host government. That is an important principle here and that principle about not discriminating against foreign property. Professor Frank as you know to your your a psychology major or student at one point and as you know better than I there is a tendency in human nature to have this us versus them mentality that oftentimes is is unjust and I think we I think John Adams remarks reflect that and in fact the commerce clause another great important principle of this country in our in our former government is about not discriminating against apples from the state next door that principle the commerce clause principle of we should treat all products all citizens all capital all services based on the quality of of those good services investments per market principles not by you know what state they they might come from initially that same principle is the bedrock of those of us who believe in rules for globalization national treatment is a term that I suspect everyone in this room knows that is the core principle embodied in our trade agreements that says we should not discriminate against foreign providers of goods or services simply by virtue of the fact that they are foreign investment treaties embody the same principle that you shouldn't it is a hedge against being discriminated against based on your foreign nationality and in that sense investment treaties like trade treaties they are all about eliminating avoiding discrimination and in that sense they embody even a broader principle a more important principle which is rule of law I had a coach once who said in sports speed isn't everything but it's almost everything in in the world that we live in whether it's commercial or or personal justice may rule of law may not be everything but it's almost everything and when you look around the world and you see countries and societies that you frankly don't want to live in I guarantee it's because you believe there is very little rule of law in that country and that you can be whisked away imprisoned for something you said or did capriciously or that your property could be taken from you capriciously and without compensation the government taking your property and not compensating you for that that is a bedrock principle of justice and rule of law exists to assure that governments can't do that there was an article I read it came out almost 10 years ago and I wish I had read it earlier in my in my life because it would have saved me many hours of reading books and taking other courses but the time it came out in 2006 it was by Douglas north and others and they since made a book of it because it I the title of it which I couldn't resist called a conceptual framework for interpreting recorded human history I thought well in 40 pages I'm going to know all this this will be excellent and I won't I won't need to pursue another another advanced degree this article is brilliant and I would really commend anyone for it Douglas north is the author and and others and he basically said there are two societies in recorded human history limited access and open access just two and that defines in a critical way the two societies in limited access societies it's basically a club if you're in the club it's great because the government the laws the power of the government bends to your favor it is the law of kings more broadly in an open access society it is rule of law individuals have rights it's not just the whim of the elite it's individuals have rights and several years ago when the arab spring occurred people forget that started with the the actions and the frustrations of a fruit vendor in Tunisia what was he reacting against he was reacting against lawlessness there was no rule of law he never knew whether he was going to have to pay a special fee or do whatever hoops he might have to jump through in order to provide for his family that is that represents a lack of rule of law so I don't shy away from advocating for investment treaties trade treaties that help institute this rule of law in fact many of our trading partners when I was at USTR what they were seeking frankly was to engage in these agreements so that they it would help them domestically deepen the roots of rule of law undertake domestic economic and political and legal reform that's what these tools are for so I know a professor frank wasn't intending this but listening to her excellent presentation and scott's yours as well which sort of minimizes the well you know you know investors don't win many of these cases and when they do they only get cents on the dollar I know you didn't intend this as the takeaway but I sit in there listening I was thinking you know the takeaway for some might be you know what it's kind of like a medical procedure it's not really good it's not nice we don't really want to talk about it but we don't have to do it very often and it doesn't hurt that much and I take the complete opposite approach we should be thankful that there are institutions and and rules to adjudicate disputes that's what makes us a civilized society that is what an open access society is all about and that is what these agreements are intended for now I get that people don't wake up and you know think gee how is corporation x doing today I hope they're okay I mean I get that these are not widows and orphans as as as claimants and I actually think that is in response to the question asked earlier about you know why if all this evidence is so great so compelling why is there all this controversy I actually attribute it to there's just this is general anti corporate mentality that gee if corporations are suing governments it's got to be a bad thing we this cannot be good and I think we we need to recognize that's a major emotive cause of this so as Grant said in his remarks I too am surprised with the controversy and I've I've listed in preparation for this the five complaints that that I that I see most prominently or commonly one is it encourages litigation well first of all as we saw in Professor Frank's remarks you know relative to global fdi the number of disputes is to say it's a drop in a bucket would be an overstatement it would have to be a very very large bucket for this to be a drop in the bucket so there's a lot of global fdi and guess what you have some disputes every now and again it the fact that you can count them is is evidence itself that of how few they are secondly it's well it prevents governments from executing their responsibilities to you know protect health and welfare come on really I mean that is not what this is about I mean I see these lists of all these claims that are brought these there are frivolous claims brought that my favorite one is this notion that Egypt is being is being sued under investor state for raising minimum wage that cases has gone nowhere will go nowhere governments are not being prevented from exercising legitimate authority look at the the countries that are subject to most of these investor states does anyone think the government of Argentina with all due respect is just trying to do its best to protect the health and welfare of its citizens it is not it is not a country that has much rule of law in it and that is it is just the the irony of some of the one of the groups in Washington that will go on mention that is most actively arguing against investor state I looked at their website the other day and they are also interestingly on record opposing tort reform in this country if there's any list it's a much longer list of frivolous cases in civil litigation in this country then there are frivolous investor state claims globally the third argument is well bits provide investment treaties provide special rights well most country certainly ours has an analog called you know the takings clause every country should have that clause I would not want to live in a country where the government could take my property and not compensate me so I don't think this is a special treat for people but even to the extent that it is that is the nature of agreements if I have a contract with Scott I obviously have rights that you don't in the audience why because I'm the one with the agreement with him trade agreements trade agreements unavoidably create special classes if if Scott in Scott kingdom agrees to give me access to my insurance companies can do business and Scott wakes up tomorrow and says you know what I've decided to nationalize my insurance companies I have a claim against him that's the nature of trade agreement so if you're going to be opposed to bilateral investment treaties because on principle they create special rights then you should oppose all international agreements are all agreements of any of any nature because they unavoidably create special rights to those stakeholders the fourth argument that you see is this is special to the U. S. China bit and that is well China can't be trusted so we shouldn't pursue this I understand that argument I just tend to take the longer view that we'll we're better up with agreements we're better off with China in the WTO and will there be bumps along the road yes but better to have agreements with rights than have no agreements in the first place the last argument I will say and then I'll wrap up I will say is at least the most most fourth right one and and I won't name this person but I was in a conversation with with someone who said well the real objection to investor state is that they undermine U. S. comparative advantage namely our comparative advantage is we have rule of law they don't so why should we encourage investment in countries that don't have rule of law by allowing this workaround rights provided by and I appreciated the candor but that I think is a very short term view we should be encouraging more rule of law in every country we live in a global economy we have a global citizenry if you will we should be encouraging rule of law everywhere so I I fear that this as good as this event that Scott is putting on and CSI is putting on I fear we will have to do this many many more times to try to balance the the misinformation and the campaign that's out there against investor state ironically there's no one really fighting hard for this you know companies aren't really all that active Linda is is to her credit and NAMS credit the the most active on this but the truth of the matter is because very few companies use investor state have to resort to investor state there's not many senior business officials that are all that vested in it and understand the importance of it which is why I come back to where I started this is a rule of law tool and we should keep it and fight for it and not be embarrassed about it thank you thank you John Linda great segue thank you Scott Greg thank you for having us here and the wonderful paper that you're working you've done and Dr. Frank's presentation was just stellar as usual I'm here representing over 14,000 manufacturers that are part of the National Association of Manufacturers our sector employs 12 million men and women directly and the effect of the type of discussion we're having here really does have a big effect on manufacturing in the United States so NAMS mission is to make the United States the best place to manufacture in the world and you know last year we saw the highest level ever of manufacturing output in the United States at over $2.08 trillion and so with that mission I think it's pretty easy to understand why I and and the NAM advocate policies and agreements that seek to attract foreign investment into the United States but I sometimes get asked well if you want to promote manufacturing in the United States why are you supporting policies why are you supporting agreements with countries overseas that will facilitate and protect U.S. investment overseas and I got to say the answer to that is very easy when you talk to manufacturers big and small throughout every single sector of the economy manufacturers U.S. manufacturers typically make most of their investments here in the United States yet as companies from Europe Asia Latin America and beyond invest in the United States every day to reach our customers to participate in our economy so too manufacturers in the United States need to invest overseas we need to sell more successfully to the 95% of the world's consumers that live outside our market we need to be able to access natural resources that are outside our borders we need to participate in infrastructure and other projects that are only happening overseas and the benefits the benefits come back here they come back to manufacturers our employees and to the broader economy by reaching millions of new customers overseas and participating in these types of economic activities we are through our foreign investment strengthening America's manufacturing base our investment overseas spurs about 50% of total U.S. exports and 42% of manufactured exports out of the United States these exports and the trillions of dollars in sales that our foreign affiliates affiliates make overseas support higher paying American jobs and they support very high levels of research and development and capital expenditure in this country and oh by the way those foreign affiliates with their billions trillions of dollars in sales about 90% of those sales stay overseas they're not selling back to the United States they're trying to reach those foreign customers so in making decisions as to invest our companies and businesses in other sectors look at a whole number of factors they see countries touting big consumer markets and growing populations indeed that's one of the reasons that the United States has long been a draw for foreign investment they hear about countries bragging about their geographic proximity their access or their their natural resources and businesses will oftentimes invest in these countries where the reward could be very great but also the risk could be large as well but investors also look very seriously at countries that lack those attributes and there the issues of stability as john mentioned rule of law and low risk are very important companies they look at all the risk issues that are out there and i will tell you from talking with CEOs the heads of international strategic development for companies big and small the general councils of companies yes they do look at whether a country has an investment a treaty whether it has investor state what is the risk that they are going to face and i also think that this point about risk and the ability to attract investment is not lost on countries around the world particularly those countries that don't have those natural attributes of a big market or resources or geographic proximity to attract investment on their own i think it's not surprising at all that of the countries in europe that very directly very quickly and very publicly told the commission that they wanted investor state dispute settlement in the t-tip are countries that actually lack those big consumer markets they're not the big countries in europe they're the ones on the periphery they lack perhaps the resources but what they want to show is that they are willing to commit to the rule of law to commit to lower risk in order to attract investment so once a company has invested they're trying to do everything they can to succeed if they're a public company they have stockholders if they're not they have employees and i i cannot emphasize how much we hear from our companies how much maintaining and growing employment is actually at the top of mind investors investing overseas is costly it's complex investors are subjecting themselves to national laws different governments different cultures and a different political system and they try to work through a wide range of issues just in establishing an investment let alone keeping it going and making it successful and sometimes they run into problems sometimes they're small but sometimes they're big and the biggest ones are when the foreign government acts in a way that seeks to undermine repudiate or force out that foreign investor and when faced with those big problems the first thing foreign investors do they try to work it out right they talk to the local government they talk to other individuals in that country local business groups they talk to the u.s. embassy they might talk to the u.s. government here they try to solve whatever the problem is and if the issue can't be solved through that type of dialogue and administrative discussions and normal procedures within that country then companies consider the options all their options again and again directly suing a foreign government is an enormous step and never one that is undertaken by an investor without substantial review and consideration in my experience i've talked to businesses about these issues and they usually try to look for any other viable path to solve their problem but sometimes there isn't a viable path consider the cases we've already seen go to an investor state dispute settlement government sees you're a property well that's the easiest example but there are many other types of government actions that negate business activity and break government promises and fundamental rights governments treat investors of different nationalities in a discriminatory manner helping domestic investors penalizing foreign investors like has happened in the Czech Republic Canada Poland governments use their sovereign authority to destroy the credibility of an investor or an investment they harass they lie to investors as has happened in Argentina Canada elsewhere governments repudiate and breach fundamental promises and contract provisions arbitrarily renig on permits issued and guarantees made making the investor no longer viable as an Ecuador Poland Argentina Turkey Guatemala we could continue but even where an investor has faced these types of arbitrary discriminatory expropriatory harassing and other unfair actions the choice to go to investor state is still really hard you heard from Scott you heard from Dr Frank ISDS is extraordinarily costly it takes years to resolve it is extremely hard for the investor to win even when an investor wins the amount one is far less than sought and usually then the loss incurred and even when the investor wins an award they then have to go and enforce that award and that can take years and is also very costly and sometimes they don't succeed this is not a strategy that any CEO general counsel or business big or small considers lightly it is always always a tough choice yes and this goes to as John was saying having this option is absolutely critical for a wide range of manufacturers service providers food industry sectors that we've seen we've seen cases in capital and transportation equipment renewable energy in fact there's about 20 cases right now by renewable energy companies globally challenging uh negative government activity uh traditional energy electricity generation consumer products innovative medical equipment and biopharmaceuticals water treatment infrastructure food products and beyond these issues affect a wide part of American industry and a wide sector that produces millions upon millions of jobs so they're you know in a world where manufacturers are facing incredibly intense competition and an unlevel playing field in many markets overseas to continue growing manufacturing we need to eliminate some of those barriers and assure our manufacturers when they are globally engaged when they invest to reach new customers and to participate in economic activities overseas that they are guaranteed that their property and their investments will be protected and that they will have a neutral their method to enforce treaties and other agreements and frankly the government promises that were made so from the NIM's perspective investment treaties and agreements investor state dispute settlement is a critical piece of a pro-growth pro-manufacturing trade policy and it's not just important for the united states it's important for any country that wants to grow its private sector through greater global engagement thank you linda stand-alone the in all the criticism of investor state dispute settlement arbitrators have not been spared perhaps you can comment on that thank you thank you scott thank you for having me here it's an honor to address this audience before i answer your question scott um let me share a few thoughts about the process of investor state arbitration from the from the perspective of an arbitration tribunal first the resolution of an investor state dispute is a very fact intensive inquiry um every case is different um the parties provide extensive briefing on the facts arbitrators have to read tens of thousands of pages of material documentation they have to read hundreds of pages of witness testimony several hundreds of pages of expert testimony they have to read and absorb and understand this is not an easy task um the result of that however is when the factor inquiry is over there is very little disagreement among the usually three members of the tribunal about what the facts of the dispute are um it was mentioned by susan that uh and i think scott started his um introductory remarks by um the point that the vast majority of awards are um rendered by consensus are rendered by consensus well one very important reason for that is that having gone through this very intense factual inquiry there is very little disagreement among reasonable persons about what the facts of the case are and i've done an experiment i encourage you to do that if you are interested um i've done an experiment with my students i've asked them to take an award they haven't read and read just the factual findings and then try to guess what the final outcome was and the rate of guessing correctly was anywhere between 95 and 99 percent um now the the resolution of an investment dispute is by definition a balance of interest why do i say by definition because arbitrators operate on the basis of treaties and treaties require a balance of interest treaties contain notions such as fairness fair and equitable treatment non-discrimination non-arbitraryness um to make a decision whether one of those provisions one of those protections has been breached the arbitrators by definition have to engage in a balance of interest analysis um and of course there is um there has been an argument made that investor state dispute settlement per se imposes a chill on the government's ability to regulate um i would say that it imposes a chill on the government's ability to misregulate in a manner that is arbitrarily discriminatory unfair and inequitable um but i would also add that this balance of interest also imposes a chill on frivolous claims by investors um when you see the results of susan's research any investor who understands what those results mean will think very hard before they initiate a claim where they don't have a serious chance of success um and i can give you to illustrate the point about the balance of interest i could give you an example an example that in a way illustrate how difficult it is to capture statistically the win or the loss because i mean at the end of the day the investor wins when the investor when the tribunal finds a breach of the treaty and awards damages the state wins when there is no breach of the treaty the damages are zero um and that's certainly the the most logical metric but there is another one which is measure the result against the expectations of the parties the parties go into a dispute with certain expectations um and i'll give you an example where um a state had revamped its energy market um to transform it into a an energy market based on purely free market principles and in the process they had to they decided to terminate pre-existing concessions that were entered into with foreign investors on the basis of the pre-existing non-market principles they did that with respect to public utility concessions that had not yet taken off the ground the contracts were signed um but the concessions were not yet in operation um and they did that understanding that there will be claims and so the question for that government was twofold one how much i will pay will i have to pay just the investors some costs or amounts invested or will i be ordered to pay future lost profits through the useful life of the terminated concession um i assume or i guess that the government was ready to pay even the future lost profits because the calculation was that the new arrangements that they had introduced were going to be more profitable even if compensation was paid um but the second concern that became apparent throughout the case was that um a case was filed by one investor in the government was very concerned that other investors are watching this very carefully and will follow suit if the case ended um favorably um at the end of the day what was awarded was um in the single digits of millions of dollars uh while the claim was for hundreds of millions of dollars um that was that would be captured statistically as a loss for the government the government issued a triumphant press release um while the investor um issued a press release condemning the tribunal for the bad award they issued the unfavorable award because the expectations were different so who won who lost is a very relative question but also the point is that there was a balance of interest in this case as well on the one hand the government clearly expropriated property contractual rights which were assets on the other hand what was the value of those assets um and um what was going to be the effect of the award on future government policies um i do want to mention also that um in terms of costs and damages awarded um this is also a very intense inquiry arbitrators usually have to read expert reports and damages in hundreds of pages um they have to look at and assess different economic models they hear and examine experts um in in the whole discussion about the outcome of investor state dispute settlement and the awards very little attention is paid to the amount of damages um what is what is what uh discussions focus on is issues relating to an interpretation of one or another provision of the treaty very little attention is paid to the um damages sections of the award this is a very difficult task for an arbitrator this is a very difficult task for the parties as well and sorting through the evidence submitted by the economic experts and deciding what the right damages are is also a very very significant fact intensive inquiry um there is no single explanation of why the claims the amount claimed is so much higher than the the end result the damages awarded but this is the the outcome of a very strict scrutiny of the claims and encounter claims or claims in the defense is submitted by both parties um if you allow me also to say a few words about the costs and the length of the proceeding i'm delighted that student student mentioned that the cost of the arbitrators themselves is not outrageously high and is um is staying constant um the cost of the legal representation of the parties um calls up well um several points on that first this is in the hands of the parties and it's understandable if there is a claim for hundreds of millions of dollars parties represented by lawyers want to make sure there is no stone unturned that is what lawyers are required when they zealously represent the interests of the client so i don't think you can blame the parties or the council representing parties for that can the arbitration tribunal contain the costs this is not easy for several reasons first it is difficult to form a view of what is important and what is less important for the purposes of deciding a dispute early on arbitrators usually form that view understandably and logically later on usually after the oral hearing um before that it is often difficult to give guidance to the parties about what they should focus on what they shouldn't focus on because the arbitrators are yet uncertain about the critical issues in the case not having yet absorbed all the evidence and all the material used by the parties um a second difficulty is the difficulty of remaining impartial throughout the process parties are very sensitive um to a situation where they may come to a conclusion rightly or wrongly that an arbitrator has made up his or her mind before all the evidence has been marshaled before all the arguments have been advanced and this would be indeed improper and so arbitrators are very sensitive to a situation where they would prejudge the outcome of a dispute not having yet received from the parties all the evidence and not having um heard all the arguments which makes it of course very difficult for the tribunal to give guidance to the parties and ask them to focus on certain aspects of the dispute and and not focus on others even though arbitrators do do that when appropriate and try to exercise judgment on when they can do that I was just yesterday I received an email from one of my co arbitrators in a case saying can you please do something about it we received yet another unsolicited submissions these parties are unstoppable we need to do something to stop them um yes yes we do but we have to do it in a way that doesn't affect the a party's ability to fully present its case and we have to do it in a way that allows the parties to be satisfied that they have been able to marshal all the evidence in advance all the arguments that they consider appropriate for the purposes of the case I think I will stop there and thank you Scott for thank you Stenema let me now open for questions yes sir hi randy cleaton from the state department from both this panel and the previous panel it seems to me that one of the main problems that people have with ISDS is a lack of transparency the proceeding is not open as in a WTO case and the settlements in particular are not not made public for many people they see the threat of this multimillion dollar demand against a government is forcing it to do things the government might otherwise not want to do and when it's settled they have no clue what was actually done it seems to me that addressing the transparency should be the best way to address that problem what do you think well the united states has already addressed transparency in 2004 among the many many changes in going from about a 15 10 page model bilateral investment treaty to an over 40 page model bilateral investment treaty some of the most important additions were to require that all the proceedings of the arbitration be public with the only exception being business confidential type of or government confidential information so that means the notice of intent to arbitrate the briefs filed on both sides the hearings all of that is public in every arbitration under a us instrument negotiated after that and then we went back and actually I think we've done this before under NAFTA and so you can find if you you know look at the State Department's website you can get a portal into all of those these provisions are in the CAFTA these provisions also allow for the amicus and others to seek to provide input to the arbitration panel which the arbitration panel gets gets to decide so I think those transparency provisions are already out there I think they make it you know probably a little bit you know there's a more submissions for arbitrators to review but I think it has helped from from the US perspective and and we we expect that model to continue forward I would only add to that that one of the things we noticed is look this is a bottom-up system uh investment treaty policy has is bottom up it's it's these 2400 or however many individual agreements all negotiated separately it's not like the GATT okay the GATT had a a set of rules that everybody signed on to okay and and so the differences there are a lot of differences between the treaties there are also a lot of differences between the facilities in which the treaty arbitration has hurt when Greg and I were doing the research we noted that for instance the exit facility down at the World Bank provide much more public information about the cases and what's going on than does Unstraw okay which is a prominent not as prominent but a prominent facility for the arbitration so I think some of this is a consequence of our of our the bottom-up way we got to treaty protections for investment so yes sir um this is Nick Perique from the State Department again um one of the complaints or arguments against ISDS and TTIP has been that between two developed entities where there is a strong court system or a public justice system you really don't need an arbitration mechanism for investors that investors could pursue their complaints in the local court system putting aside the argument that TTIP might be about creating a gold standard for agreements with emerging markets and so on what is the direct response to this to this complaint or argument let me start it and then turn it over to John as we looked at it you've got to consider the existence of investor status development in the context of what's the alternative and the alternative for us historically not going back to gunboat diplomacy but the alternative has been espousal all right and while there is a lot of happy talk about the wonderful us and european legal systems okay there is a very unhappy history of espousal and you don't have to go too very far to find out that many companies I would I would point you to the Raytheon versus Palermo dispute a dispute that went on where Raytheon defense contract United States defense contractor lost it had a major expropriation in Italy this is a g7 member okay and proceeded in local courts for 10 or 15 years finally there was State Department of Spousal it wound up at the International Court of Justice and Raytheon lost but the total time consumed was massive and this is with a g7 party okay all right now europe is is not just Italy or not just Britain or not just Holland which Holland probably negotiates the best agreements it is Bulgaria it is a number of other economies likewise I think there is a Canadian company the loan group funeral home company from family owned funeral home company that found out about Mississippi justice in the United States if you look at the the inapt case the loan case so I think it's very important to consider the alternative is frankly unsatisfactory but John do you perspective you must have been an excellent debater because when you ask a question then you say but don't give the best answer in response that's that's clever of you but I do think since t-tip is intended to serve as best practices I think that is a compelling reason to include it but but beyond that look if it's not nests if it it's unlikely to be used very much I will concede that but that doesn't strike me as a compelling argument not to have it it is a best practice it is a good thing to have and the alternative is to every time you go into a negotiation say basically you have to make a value judgment about the country and I think that gets uncomfortable as someone from the State Department would know and so I think it's best this is a good thing to have and we should have it in all of our agreements could I just add Scott you know a few things the United States has bilateral investment treaties with eight EU member countries already slightly different earlier and so you know one could argue certainly from the sake of consistency and having the same type of relationship at that treaty international agreement level with all members of the EU would put all members of the EU and the United States on unequal footing going back to the earlier question on transparency we don't have transparency in those earlier instruments the many EU instruments out there before CEDA did not have transparency and so this is really a way to update and modernize the investment relationship but I think it's a lot more than those answers which is the biggest part of the US European relationship is cross-border investment it totally dwarfs the exports and the imports and you know on the the trade side people say well you know tariffs between the US and EU are they're already really low but nobody's saying well then let's not negotiate the elimination of tariffs between the United States and EU because that's going to save a heck of a lot of money and that's going to expand our economic growth we have a vibrant relationship on investment we can do better and agreeing amongst ourselves to widely respected international rules that both our countries and systems have already adopted internally is part of doing the type of agreement that's going to grow both our regions at a time we really need to just to add that existing treaties already encourage investors to use the domestic legal system traditional bits have the so-called fork in the road where the investor chooses international arbitration or domestic litigation but that evolved for example in NAFTA I think it was at the suggestion of Mexico saying well we want to encourage investors to use our courts and if they have to choose they'll always go for arbitration how do we get them to go to our courts maybe they'll like them and so NAFTA includes this U-turn provision where you can go to domestic courts litigate stop waive your right to continue and then go to arbitration if you don't like what's happening in domestic courts other treaties contain the so-called domestic litigation requirement the investor must litigate 12 months or 18 months in domestic courts before the investor can go to international arbitration so the option is there but there is an encouragement to use the domestic legal system and so if you will the the investor would resort to arbitration when the investor considers rightly or wrongly that the domestic legal system is not adequate to address the issues in dispute I could go on all day but we have time for two more questions I see two hands over here we'll take them let's take both questions and then the panels can provide responses so go ahead sir yeah wait for the microphone there thank you I Ian Ferguson of the congressional research service I'm interested in no considering there was a discussion in the last panel about and the prospect or possibility of an appellate body given that there is language in TPA the current TPA and and even in previous TPAs about that I'd be interested in knowing your panels you all's interest to desirability your practicality a discussion of that hi my name is Courtney Lewis and I'm from the Sierra Club first of all I just want to say thank you for Mr. Alex to Mr. Alexander off for mentioning the chilling impacts because of all the presentations you're the the presenters you're the only one who mentioned that I did want to ask though you said that you said that ICDS can put a chill on government's ability to implement rules that are arbitrary it made me think of an example recently in which Ireland is considering plain packaging rules for cigarettes because the majority of smokers in Ireland begin when their children and Philip Morris which is of course is already suing Australia for its plain packaging rules have has already given an indication that it would very likely consider ISDS against Ireland and other European countries if they implemented those sort of rules so my question to you is would you call plain packaging rules directed at children arbitrary and my second question is just more broadly this could be something that Dr. Frank could answer anybody else but I do think it's significant to take into account the chilling impacts of regulations when looking at the impacts of ISDS cases and I was wondering whether there have been any attempts to quantify what the chilling impacts of ISDS actually is and if not any advice on how that kind of quanta quantification could happen okay thank you let's take take those questions in order if we could that would be a good way to wrap up the appellate body look we have an opportunity for a test market in the U.S. Central America Dominican Republic free trade agreement DRCAPTA Congress insisted they are an appellate mechanism there are now I think five or six correct me if I'm wrong cases investment cases among the seven DRCAPTA parties so that would be the first place to actually practically attempt an appellate mechanism it's it's it's not without controversy it's not without problems but it's probably worth trying and that's the place where there's currently sort of statutory language to require it and we now have enough cases that the parties may want to get together and talk about it but Linda I'd agree with all that I'd also point out that you know Ixid rules have an annulment procedure which is not a not a full appellate mechanism by any stretch of the imagination but if there's any question about you know arbitrator bias or there's a an egregious you know action contrary to basic rules I don't remember the legal standards I'm sure it's that standard mirror does there is no there is a way to to review those cases on the appellate mechanism it is in the last grant of TPA it's in the current bill that's up there you know one of the things that business looks at is you know maybe business would want to look at it as well but it also has the possibility of elongating it but I think folks are willing to accept that going forward on that just a few words on the potential appellate court it's a balance they are pros and cons and they have to be considered very carefully Susan was talking about the length and the cost of the proceeding adding another layer would obviously increase the cost and lengthen the proceeding on the other side of the balance is what is it supposed to cure the inconsistencies in jurisprudence what are they to what extent they exist are they based on facts or law this also needs to be carefully considered my my view happens to be that the the issue of the inconsistency of awards is overblown and whenever debate focuses on awards that approach a legal issue from a different perspective that discussion neglects the main point I can give you an example there was a raging debate about two decisions two awards hgs versus pakistan and hgs versus philippines that treated differently a provision on the treaty called in the treaty called the umbrella clause well in two different treaties but presumably the similar provision and what this debate missed was that at the end of the day the the tribunals in both cases came to the same result but to the extent that they're inconsistencies in the jurisprudence and that's a very big debate then how an appellate court would address those inconsistencies has to be balanced against the cost and the length of the process thank you and on as we'll turn to stand to me for his response on on regulatory chill would point out two things that are in our paper first point to the language that is currently in the us model bit which which states explicitly that except in rare circumstances nondiscriminatory regulatory actions that are designed and applied to protect legitimate public welfare objectives do not constitute an indirect expropriation so us bits are explicit about regulatory activity as long as it is it is nondiscriminatory second i would encourage you to examine the panel discussion in the famous methanics case back in at the time of the of the 2001 2002 trade promotion authority debate one of the more popular cases to discuss was a filed case by the methanics corporation against the united states methodically as a canadian producer of a gasoline additive mbte the the language that that the appellate body use first of all after after we got through the 2004 model bit methanics lost the case and in the and the rationale for the loss the arbitrator stated very clearly that the methanics challenge of a regulatory initiative that was nondiscriminatory and and and legitimately applied was not an expropriation and that seems to be the record as far as we can determine for most cases but i'll let stand over oh i'm sorry john did you have a point of view or it's stand over whether or not the so-called plain packaging measures of australia are a breach of the treaty under which the claim is filed is up to the tribunal to decide i would in the context of a regulatory chill though i think we should keep in mind that those measures have been challenged also in the wto as far as i know by the dominican republic they have also been challenged in australia's domestic courts and so to the extent that we can talk about a regulatory chill of investor state dispute settlement we should not forget that there are other means of challenging those measures they have been challenged in those other fora and it seems to me that investor state dispute settlement does not provide for a more significant regulatory chill if you will to use that terminology then the prospect of domestic litigation or litigation in the wto in some way every time a government domestically expropriates property for in the exercise of its rights of eminent domain there is a regulatory chill in the form of the government has to pay compensation and yet we don't consider the fifth amendment as imposing some regulatory chill on the ability of the sovereign to regulate or the equivalent protections of property in in other states so to i think the point i want to make is that investor state dispute settlement does not really provide for any bigger impact in the in terms of regulatory chill than any other dispute settlement mechanisms such as the wto domestic litigation thank you john or linda stand up i just made the point i was going to make the the only thing i would add is you know i sort of don't want to take the burden of proof implicit in your question that you know those of us who support investor state need to prove that there's no regulatory chill i think the burden is on the people who think investor state is a bad thing and is chilling legitimate regulation i don't think there are facts are there to support that claim but if those who want to continue to make that claim can provide some evidence and by evidence i don't mean frivolous going nowhere claims that were filed 10 years ago i mean claims that have been successful that will be a very short list and it may be a nil subset excuse me a nil set so i think professor frank said it was statistically insignificant when she looked at this very issue and you know stan mary talked about that that case in particular there's domestic stakeholders in ireland and in australia beyond that industry that are concerned there are other groups from a wide range of industries that are concerned because of the the taking of a basic form of intellectual property a trademark that the government had had issued and so it's um i just go back to professor frank well we've overstayed our welcome with you but we do thank you for your interest in the subject we hope to continue on this topic with our future research thank you for coming and please thank uh join me in thanking the panelists