Thirty-five graduate students in the International Economic Law and Policy programme (IELPO) of Spanish core member, Universitat de Barcelona, took part in a half-day training session at UNCTAD February 24, as part of a Vi-organized study visit.

The programme began with a presentation on regulatory divergence and trade agreements by Luisa Rodriguez, of the Division on International Trade in Goods and Services, and Commodities.

"Regulatory divergence -- differences in regulatory outcomes or incompatibilities in regulations across jurisdictions – can impede trade or raise trade costs,” she explained. "However, addressing regulatory divergence through trade agreements is very difficult.  The challenge lies in agreeing on a common definition and understanding of regulatory trade barriers, and identifying which ones can be realistically eliminated,” she added.

Different tools and mechanisms to promote regulatory convergence – harmonization, mutual recognition and regulatory cooperation, for example – are increasingly being incorporated in trade agreements, “but the effectiveness of some mechanisms related to regulatory cooperation in terms of promoting trade has not been thoroughly researched,” she said. “Moreover, some of these tools and mechanisms require developing domestic capacities and increasing financial resources to enable their implementation. No longer being able to consider alternative regulatory approaches to achieve legitimate domestic policy objectives has also led to concerns from the perspective of developing countries.”

The students then engaged in a discussion on reforming international investment governance during the session led by Hamed El-Kady, of the Division on Investment and Enterprise.

"There is an absence of a multilateral agreement on investment," El-Kady said. “International investment rulemaking lacks system-wide coordination and countries conclude treaties at the bilateral and regional levels. These agreements can also inappropriately narrow national policy options to pursue legitimate public policy objectives. "

At the same time, investor-State disputes are proliferating with 42 new cases filed in 2014 bringing the total treaty-based cases to 608 involving 99 countries.

“Among a broad range of governmental measures challenged in 2014, a number of cases concerned sustainable development sectors such as protection of the environment, infrastructure, supply of electricity, gas and water, port modernization, and renewable energy,” El-Kady said.

"Countries are increasingly dissatisfied with the current regime. The question today is no longer whether to reform, but how and to what extent", El-Kady added.

UNCTAD sees a need for reform in five areas: safeguarding the state’s right to regulate in the public interest, reform of dispute settlement, promoting and facilitating investment, ensuring responsible investment, and improving the general coherence of the global system of agreements.

"UNCTAD’s Investment Policy Framework for Sustainable Development and UNCTAD's Roadmap for IIA Reform offer concrete guidance on how to formulate and reform investment policies at the national and international levels with a view to making IIAs work for sustainable development objectives," he concluded.