The Rule of Law Without the Rule of Lawyers? Why Investment Arbitrators Are from Mars, Trade Adjudicators from Venus

At the twentieth anniversary of the World Trade Organization (WTO), the WTO’s dispute settlement system is celebrated as one of the organization’s biggest achievements. Although powerful members such as China, the European Union (EU), and the United States are regularly on the losing side of WTO trade disputes, overall support for the system remains high. If anything, it has increased over time, with early criticism by civil society waning. Compare this situation to investor-state dispute settlement (ISDS), centered around the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). ISDS, which started in earnest around the same time that the WTO was created, is under fire not only in capital-importing countries ranging from Ecuador, Indonesia, and South Africa but also in capital-exporting nations such as Australia, Germany, and the United States. Indeed, in the ongoing EU-U.S. negotiations over a Transatlantic Trade and Investment Partnership (TTIP), ISDS emerged as one of the biggest bones of contention.