Wolfgang Alschner

Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory

Bilateral investment treaties (BITs) are incomplete contracts as contracting states leave contractual gaps inadvertently, necessarily or strategically open. When an investment dispute is brought to international arbitration, these gaps must be filled. Investment tribunals thus not only have a dispute settlement function, but are also gap-filling norm-setters. The degree to which this gap-filling role is exercise must depend, however, on the degree of contractual incompleteness. First generation BITs are highly incomplete contracts containing only brief and vague provisions delegating much of the gap-filling to tribunals. Second generation BITs, in contrast, are complex and comprehensive agreements. Their degree of incompleteness is considerably lower with contracting states employing a range of different gap-filling alternatives to courts such as comprehensive contracting or escape clauses all of which warrant judicial restraint and formalism. Second generation BITs can also assist arbitral gap-filling in first generation treaties. As tribunals lack the sophistication to either reach ex ante or ex post efficient norm-setting, they should defer to how contractual gaps are closed by the same contracting parties in second generation BITs rather than devising their own solution.

The New Gold Standard? Empirically Situating the Trans-Pacific Partnership in the Investment Treaty Universe

The Trans-Pacific Partnership (TPP) has been labeled a ‘new, high-standard trade agreement’. But just how ‘new’ and ‘high’ are the standards it sets? To answer that question we combine traditional legal analysis with computational text comparisons situating the TPP in the universe of international investment agreements (IIAs). We find that the TPP investment chapter offers few truly novel features — 81% of its text is taken from prior American treaties. Compared to the majority of IIAs, however, the TPP goes beyond existing practice: it sets high levels of investment protection, explicitly safeguards host state sovereignty and establishes a sophisticated investment arbitration architecture. Nevertheless, the TPP is unlikely to revolutionize the IIA universe. Its innovations are open to circumvention given that older treaties remain in force parallel to the TPP. Moreover, as disagreement persists with Europe and BRICS countries, the TPP is unlikely to serve as a template for future multilateralization.

Towards an automated production of legal texts using recurrent neural networks

This paper constructs a legal text generation and assembly system in the domain of international investment law. We rely on a corpus of 1600+ bilateral investment treaties split into 22 600 articles to train a character-level recurrent neural network (char-RNN). Prior work [1] has shown that while char-RNNs can produce legally meaningful texts, its output tends to be repetitive. In this contribution, we remedy this shortcoming by proposing a new framework for RNN-based text production. First, we elicit priors at the training stage to give more weight to under-represented treaty practice. Second, we use q-gram distance and GloVe word embeddings [12] as filters imposed on the generated texts to draw them closer to a target document. Third, we develop a validation routine that compares the distribution of pre-defined legal concepts in actual and generated texts. Our results indicate that the RNN produces texts that are not repetitive and convey meaningful legal concepts. We conclude by showcasing a practical application of our framework by predicting provisions of the USA-China bilateral investment treaty currently under negotiation.

Text of Trade Agreements (ToTA)-A Structured Corpus for the Text-as-Data Analysis of Preferential Trade Agreements: Text of Trade Agreements

With multilateral negotiations at the World Trade Organization (WTO) in deadlock, rulemaking on international economic governance has shifted to preferential trade agreements (PTAs). To facilitate the scholarly investigation of the fast�?growing universe of PTAs, this article introduces a machine�?readable and structured full text corpus of 448 WTO�?notified trade agreements stored on a Github repository—the Text of Trade Agreements (ToTA) corpus. The article (1) provides a summary analysis of the ToTA corpus, (2) illustrates how text�?as�?data techniques can be used to investigate PTA design using ToTA, including through an interactive website accompanying this research, and (3) concludes with an overview of research applications involving this PTA text corpus in economics, political science, and law. The current codebook is attached herein as an appendix. The dataset, codebook, and code, as updated, are available online at the Github website.