Blessing in Disguise – The Impact of Global Value Chains on Investment Regulation

Globalization has brought one of the key challenges to modern commercial world – regionalization of production, fragmentation and outsourcing. As a result, Global Value Chains (GVCs) and Global Production Networks (GPNs) have sprawled around the globe as the dominant economic model, whilst outsourced industrial production directly reflects business functions of Transnational Corporations (TNCs). In this context, law has been often left at the backseat, especially considering the high number of Bilateral Investment Treaties (BITs) currently in place. However, Preferential Trade Agreements (PTAs) have been also used to incorporate necessary investment protection clauses.

The paper will aim to compare and evaluate the scope of investment protection available under BITs as opposed to PTAs for the latest generation of treaty instruments. It will further address the existing current challenge of GVCs – answering the question of whether the chains have considerably contributed to the changes in modern investment policies. It will further enable analyzing the recent dynamics in GVCs/GPNs and its application to current investment trends, thus providing links to a wider treaty law and Public International Law (PIL) levels. Overall, the paper will also bring to the surface the issues of pre-investment and post-investment alongside transborder investment flows in the context of GVCs/GPNs.

The paper will add to the existing legal debate on the nature of international investment and contribute to the legal enquiry on the challenges to modern investment posed by GVCs. The paper will be beneficial for postgraduate researchers as well as for a wider academic and legal audience interested in commercial, trade and investment regulation.