Authority, Legitimacy, and Fragmentation in the (Envisaged) Dispute Settlement Disciplines in Mega-Regionals

This chapter analyses the inter-state and investor-state dispute settlement disciplines included in mega-regionals, focusing on the Comprehensive Economic and Trade Agreement and the Trans-Pacific Partnership. It argues that dispute settlement assumes a pivotal role in trade and investment negotiations, raising fundamental questions about authority and legitimacy and concerns of fragmentation. While preferences of states participating in mega-regionals coincide in agreeing on inter-state arbitration as a compliance mechanism that minimises the authority of dispute resolvers and negative effects of fragmentation in relation to the World Trade Organization, starker differences arise on investor-state dispute settlement. Whereas the EU pushes for the creation of permanent judicial bodies, other states seemingly prefer a reformed version of investor-state arbitration. The underlying clash of ideologies shapes what may become a constitutional moment for international economic law as the debates about the reform of investment dispute settlement progress.