The Hidden Tool in a Foreign Investorʼs Toolbox:The Trade Preference Program as a “Carrot and Stick” to Secure Compliance with International Law Obligations

Abstract

This Article considers the use of the trade preference program as a tool to pressure a State to comply with its international law obligations. Recent international investment disputes involving Argentina, Ecuador, and the Russian Federation bring to light the increasing utility of U.S. and EU trade preference programs as retaliatory mechanisms for such noncompliance. Particularly where a host State either has not consented to arbitration or has allegedly failed to comply with an adverse award, this Article affirms that the trade preference program can have a meaningful impact on a host State and be a valuable tool for a foreign investor.