Abstract
Investors have the right to protect their investments just as host states have the right to protect public interests, otherwise recognized as public interest regulation. Arbitration can disrupt the balance between state and investor rights when it whittles away or strips entirely the state’s regulatory autonomy. Public interest regulation, such as environmental protection, remains critical as it holds states simultaneously accountable to, inter alia, their constituents as well as international norms and conventions. A trade agreement provision that infringes upon a state’s regulatory liberty may force it to navigate a complex legal landscape in which commitments to domestic and international audiences directly conflict with their need to adhere to the provision. Drafters must grant states heightened deference regarding public interest regulations to inhibit future conflicts between states’ legal duties and trade agreement obligations.
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