One of the most contentious debates in trade policy right now is over investor-state dispute settlement, a set of provisions that allows foreign investors to sue host country governments when they believe their rights have been violated. ISDS provisions are now a standard part of many countries’ trade agreements, but are often criticized for giving multinational corporations too much influence over developing countries’ sovereignty and democracy.
For the debate to make any headway, it needs to be informed by the origins of ISDS. When the historical context is understood, it becomes clear that the provisions are outdated in many ways — it may be time to find new ways to define the relationships of multinational corporations to the developing countries where they invest.