Investment Protection Under the EU–UK Trade and Cooperation Agreement: Limited but Predictable?

After ten months of intense negotiations, the EU-UK Trade and Cooperation Agreement (TCA) was concluded on 24 December 2020. The TCA runs to 1,246 pages and covers what may be the broadest range of issues ever to be addressed within an international trade agreement. However, the tca’s limited investment protection provisions have been met with perplexity and expressions of disappointment among commentators. In particular, the limited set of substantive investment protections and the absence of an investor-State dispute settlement (ISDS) mechanism have been viewed as something of a missed opportunity, particularly as the EU and the UK have agreed to more expansive investment chapters in recent trade agreements with third parties. Why did the UK and the EU ultimately limit the scope of investment protection and exclude ISDS under the TCA? This article examines this question by analysing the key features of the tca’s investment chapter and tracing the underlying investment policy dynamics, including the UK’s and the EU’s respective negotiating positions that led to the tca’s circumscribed investment chapter. This article also considers the significance and potential implications of the TCA for the UK’s and the EU’s respective investment policies going forward.