Investment and trade: The ‘Lottie and Lisa’ of international economic law?

Introduction In Erich Kästner’s Das Doppelte Lottchen (literally, ‘The Double Lotties’, translated into English under the title Lottie and Lisa) Lisa’s hair is curly, Lottie’s hair is braided, but otherwise they look alike. This is not surprising because they are in fact identical twins, separated at a very young age following an unfortunate divorce, each of them subsequently being raised by one of their parents, and developing different characters. When chance brings the nine-year-old Lisa and Lottie together at summer camp, they recognise their common heritage and decide to trade places, so each of them can meet their previously unknown (other) parent. The cheerful ending - decidedly optimistic, for a children’s novel initially published in 1949 Germany - has the twin girls and their parents reunited as a family. The charm of the original story has persisted throughout the ensuing decades as the inspiration of several children’s films, including Disney’s The Parent Trap. In many ways, Kästner’s Lottie and Lisa are analogous to the two major branches of international economic law - international trade regulation and investment protection law. As economic and social phenomena, international trade and investment are inextricably linked. Yet like twins separated at birth, the regulation of these economic areas has been entrusted to discrete legal systems, with different characteristics. There are clear historical and political economy reasons for the development of the bifurcation of the regulatory fields, but these reasons should no longer be dispositive and the existing legal separation is difficult to justify in today’s globalised economy. Indeed, in spite of this functional and regulatory separation, in practice international trade and investment are more closely tied to each other now than ever before. Had the need (or opportunity) arisen today to draw up an international system of international economic law from scratch, it is unlikely that trade and investment would have been treated so separately.