Professor Abi-Saab stated, at the closing of the 2016 TWAIL Cairo Conference, that his time working on an ICSID tribunal had been akin to \u201cworking behind enemy lines\u201d. As one of international law\u2019s most prominent and well-rounded figures to come from an emerging country, his words echo a largely corroborated sentiment, which has permeated the relationship with foreign investment between the North and South: distrust. The investment field provides a robust framework for analyzing the dissonance between North and South \u2014 as Carlos Montenegro suggests in his work, the origin of international investment agreements (IIAs) is inherently antagonistic, as it is tied to the North\u2019s colonial purpose of conquering and controlling the South.<\/p>\n\n\n\n
Criticism of IIAs, while not new, has seen significant growth since the neoliberal crisis of the late 2000s, with much of this critique grounded in concerns over the persistent and unequal distribution of power within the investment regime. The notion that IIAs require a structural modification has been discussed on mainstream forums for years now, such as the UNCITRAL Working Group III<\/a> and the more recent UNIDROIT Project<\/a>. These projects tackle issues such as the reproduction of asymmetrical power relations between developed and developing States, the rising dissatisfaction with Investor-State Dispute Settlement (ISDS), the perceived pro-investor bias of the treaties and the lack of representation outside of the eurocentric sphere, to name a few. However, none of these projects aim to drastically change the treaties in regards to the main tension points. In this sense, this post seeks to analyse some of the ways in which developing countries have been regulating their own FDI. <\/p>\n\n\n\n This analysis begins by examining Brazil’s Cooperation and Investment Facilitation Agreements (CIFAs), which serve as an alternative to traditional Bilateral Investment Treaties (BITs), before proceeding to consider more conventional BITs concluded between developing nations. The central question that arises is: can projects of this kind genuinely be expected to alter, in a meaningful way, the colonial foundations of the IIA regime?<\/p>\n\n\n\n Abi-Saab\u2019s opinion \u2014 that investment law\u2019s institutions, in general, are embedded in a villainous spirit of sorts \u2014 actually echoes historical criticism from the Global South against IIAs, as they are the primary basis for the development of these relationships. That is to say, the foundation of IIAs is intertwined with the colonial origins of the North\u2013South divide. The eurocentric monopoly makes itself noticeable in virtually every dimension of international investment law, as the North dictates the normative and institutional frameworks of the investment regime. Thus, the situation presents itself as a \u201cUs v. Them<\/em>\u201d scenario. In this battle against \u201cthe Northern enemy\u201d, then, what other alternative is left to the South, other than to join forces and strike back?<\/p>\n\n\n\n The Fellowship of the South: Brazil\u2019s Cooperation and Facilitation Agreements\u00a0<\/em><\/strong><\/p>\n\n\n\n South-South cooperation is a theme widely broached in different sectors of international law. In this light, Brazil\u2019s CFIAs emerge as an alternative to the classic BITs, entirely formulated by Brazil, and with their Global South counterparts in mind. The CFIA is a new model of IIA that drastically deviates from the standardized pattern enshrined in the BITs, which have been essentially unchanged since their conception in the 1960s. Unlike the traditional North\u2013South IIAs, the CFIA is framed as an instrument of solidarity, mutual development, and shared economic priorities among developing countries. The CFIA flips the axis in its head: while the BIT is purposely focused on the promotion and protection of investment, the CFIA is centered around the cooperation and the facilitation of investments. <\/p>\n\n\n\n The novelty with the CFIAs<\/a> lies mainly with the fact that it intentionally excludes ISDS of its clauses, in consonance with Brazil\u2019s traditional position against this mechanism. Instead, it brings out the core idea of prevention of conflicts, through a series of closer interactions between the undersigned parties \u2014 for instance, the figure of the ombudsman<\/em> is introduced as a designated focal point in each party\u2019s territory, tasked with serving as the initial channel of communication for any issue related to the investment. Moreover, Joint Committees are established with the complementary mandate of overseeing the investment relationship from the negotiation phase through implementation, ensuring continuous dialogue and coordination. Should a dispute arise that cannot be resolved through either of these mechanisms, the matter may then be escalated, allowing one State to initiate arbitral proceedings against the other. Other staple clauses are also missing from CFIAs, such as FET (Fair and Equitable Treatment). There is a clear horizontalization of the parties that differs drastically from the standard BIT model. <\/p>\n\n\n\n Nevertheless, this model also sheds light on different issues in regards to South-South IIAs: for one, the South is not a monolith. The idyllic notion of cooperation clashes against facts such as the significant power imbalance between developing countries \u2014 as an example, Brazil\u2019s GDP is nearly 100 times larger than Mozambique\u2019s GDP, the first ever State to sign a CFIA. It is crucial to point out that Brazil is an outlier in the investment world: while it has never ratified a BIT, staunchly opposing ISDS and the possible interference of a foreign enterprise in their sovereign rights, it has retained its position as Latin America\u2019s largest FDI (Foreign Direct Investment) recipient<\/a>. Thus, this model is not universal by design; it is tailored to Brazil\u2019s profile and interests.<\/p>\n\n\n\n The Good, the Bad and the Bilateral Investment<\/em><\/strong><\/p>\n\n\n\n One cannot ignore that South-South cooperation in investment also displays glaring issues. For one, a central paradox lies in the fact that, despite the discourse of horizontal cooperation, South-South IIAs can \u2014 and often do \u2014 replicate the main points of critique against traditional treaties. The International Trade Center (2020) mapped out that, while South-South investment flows are growing, especially in the technological market, a considerable amount of challenges remain, such as a limited operational capacity to receive foreign investments and political and economic volatility. <\/p>\n\n\n\n Does a treaty signed between parties with vastly different socioeconomic realities not also necessarily reflect a power imbalance? Does South-South cooperation in IIAs constitute an alternative pathway in the world of investment law, or do they simply reproduce the hegemonic template among themselves? <\/p>\n\n\n\n China\u2019s exponential growth as an exporter and importer of FDI is evidence that the \u201cdeveloping country\u201d label is quite relative, and the power imbalances among Southern actors can be almost as significant as the long-standing asymmetries that have characterized their relations with the North. Moreover, South-South cooperation, by itself, does not necessarily imply any change within the investment framework. On the contrary, other South-South cooperation agreements have largely followed the classic BIT model \u2014 e.g. <\/em>the Argentina-Guatemala BIT<\/a> or the Sri Lanka-Thailand BIT<\/a>, both of which present extensive investor protections, FET clauses, and the adoption of the ISDS mechanism. The South African Development Community Model BIT (2012)<\/a> also contains these controversial clauses, despite its objective being the encouragement and increase of investments, with special attention given to the Host State. <\/p>\n\n\n\n Closing remarks<\/em><\/strong><\/p>\n\n\n\n Within this context, it is noteworthy to mention that CFIAs are still relatively new, as the first treaty was signed in 2015, and there is no concrete evidence that any of Brazil\u2019s three CFIAs in force have attracted more FDI to the country. Thus, as Professor Carolina Moehlecke (2025) noted, Brazil\u2019s CFIAs take into consideration the Brazilian enterprises that have already established operations abroad, aiming to protect these investments more than it aims to attract FDI through these agreements.<\/p>\n\n\n\n Additionally, not every emerging economy may view an CFIA-style model as aligned with its interests. On one hand, the normative aspirations of South-South cooperation (such as preserving policy space, enhancing development autonomy, and fostering mutual benefits) could be beneficial to both parties, and could potentially strengthen the South as a bloc. On the other hand, Global South states often face competitive pressures to appear investment-friendly to the North, which, in turn, encourages the adoption of familiar treaty designs over newer ones. In many cases, the expected gains from attracting investment from a developed, capital-exporting State, may seem more compelling to a developing country than engaging in a partnership with another Southern state that has comparatively limited capital to offer.<\/p>\n\n\n\n