International Trade and Investment Law

International trade and investment law comprises the rules and institutions that govern cross-border commercial exchanges and capital flows, integrating disciplines from trade policy, investment protection and dispute settlement. At its core lies the multilateral trading system under the World Trade Organization, which establishes principles such as most-favoured-nation treatment, national treatment and binding dispute resolution for tariffs, non-tariff measures and services. Parallel frameworks of bilateral and regional trade and investment agreements extend or refine these norms, often embedding chapters on sustainable development, digital trade and investor–state dispute settlement. Investment law is centred on bilateral investment treaties and multilateral instruments that guarantee rights such as fair and equitable treatment, protection against expropriation and free transfer of funds, while permitting host states to regulate in the public interest. Dispute settlement underpins both fields: WTO panels and appellate rulings resolve trade claims, whereas investor–state arbitration, under UNCITRAL or ICSID rules, adjudicates alleged treaty breaches by states. Together, these regimes seek to balance openness with regulatory autonomy, promote economic integration and provide legal certainty, yet they also face challenges of coherence, forum-shopping and the evolving demands of globalisation, digitalisation and sustainability.

Research from Nature Portfolio

Survey-embedded experiments in three major middle-income democracies demonstrate unexpectedly strong public support for domestic sustainability regulations aligned with high-income-country supply-chain rules, driven by expectations of long-term social and environmental gains outweighing immediate cost concerns.

An event-data analysis reveals that improvements in bilateral diplomatic relations between a major economy and its trading partners significantly boost exports, whereas tensions exert a measurable drag on trade flows, highlighting the asymmetric sensitivity of export and import channels to political dynamics.

A throughflow-based accounting study assesses alternative designs of a major carbon border adjustment mechanism, showing that schemes referencing exporters’ direct and indirect emission intensities achieve greater reductions in carbon leakage, but may face higher implementation complexity and require cooperative revenue-recycling to protect vulnerable exporters.

International Trade and Investment Law publication trend

The graph below shows the total number of articles in international trade and investment law across all publications each year (not limited to Nature Index journals).

Technical terms

Most-Favoured-Nation (MFN) Treatment: A principle ensuring that any favourable trade concession granted to one WTO or treaty partner is extended to all others.

National Treatment: A requirement that imported goods, services or investors be treated no less favourably than domestic counterparts once inside a market.

Investor–State Dispute Settlement (ISDS): A mechanism allowing foreign investors to initiate arbitration against host states for alleged treaty breaches such as expropriation or unfair treatment.

Foreign Direct Investment (FDI): Cross-border investments where an investor acquires a lasting interest and significant influence in a foreign enterprise.

Non-Tariff Measure (NTM): A regulatory or policy instrument—other than customs tariffs—that affects international trade, such as quotas, standards and licensing requirements.

Dispute Settlement Mechanism (DSM): A formal process under a trade or investment agreement for adjudicating alleged violations and authorising remedial measures.

References

1. Litigation for Sale: Private Firms and WTO Dispute Escalation. American Political Science Review (2023).
2. Politicisation, business lobbying, and the design of preferential trade agreements. Journal of European Public Policy (2023).
3. Labor Regimes, Global Production Networks, and State–Society Relations: Assessing the Impact of the EU–Vietnam Free Trade Agreement on Labor in Vietnam. Economic Geography (2024).
4. Stringent sustainability regulations for global supply chains are supported across middle-income democracies. Nature Communications (2024).
5. The effect of fluctuations in bilateral relations on trade: evidence from China and ASEAN countries. Humanities and Social Sciences Communications (2024).
6. Alternative carbon border adjustment mechanisms in the European Union and international responses: Aggregate and within-coalition results. Energy Policy (2023).