Australia’s Rejection of Investor-State, from AUSFTA to the Gillard Government’s Trade Policy and the implications for Canada

By Janet M Eaton, PhD


This paper places the Australian Labor government’s 2011 policy of Investor -State rejection within the context of the escalating criticism of Investor-State Agreements [ISAs] and the extent to which they are being revisited and rejected by a growing number of countries. It offers insight into how and why the former Labor government of Australia came to its decision to reject Investor -State in its 2011 Trade Policy Statement while considering whether Australia’s policy of Investor-State rejection should be an option for Canada.

During the writing of this paper an election in Australia resulted in a change of government with the Labor government of Prime Minister Julia Gillard, that had rejected Investor-State, being defeated by the Conservatives under Tony Abbot. As regards the impact on Investor-State, the new trade minister, Andrew Robb, was quoted after the election as saying “foreign corporations wanting to sue Australian governments will have to cool their heels.” He also noted that Australia’s negotiating position on the Trans Pacific Partnership Agreement [TPPA] would remain the same despite an election commitment to overturn the blanket prohibition on ”investor-state dispute settlement” provisions.

At the same time a post-election article in Australia’s GlobalMail, Abbott: Open for Business and Investor State Lawsuits revealed that the Conservative- led Coalition’s recently released trade policy included a commitment to “remaining open to utilising Investor-State Dispute Settlement (ISDS) clauses as part of Australia’s negotiating position” in future trade deals.