The role of investment treaties in investment liberalisation
Investment treaties grant international legal rights to foreign investors. Historically, investment treaties focused exclusively on the protection of existing investments from adverse government action – for example, by requiring a host state to pay compensation if it expropriates a foreign investment. However, modern investment treaties also contain investment liberalisation provisions that govern the admission and establishment of new foreign investment. Investment liberalisation provisions limit states’ ability to restrict or place conditions on new foreign investments.