Posted: September 8th, 2022

IMPACT OF GLOBAL HEALTH ISSUE (COVID 19)

IMPACT OF GLOBAL HEALTH ISSUE (COVID 19)

Introduction
The world is experiencing unprecedented times of COVID-19 pandemic. The health crisis is affecting economies across the world including international treaties and agreements. It will continue impacting international agreements even in the future. It has affected international treaties and agreements such as BIT, TIPs, IIAs, force majure, FET, and state of necessity. The purpose of the paper is to discuss the impact of the global health issue (COVID-19) on international agreements.
Global Health Crisis and Bilateral International Treaties
The global health issue is slowing down the treaty-making pace after several negotiations for bilateral investment treaties (BITs) as well as treaties with investment provisions (TIPs) scheduled for 2020 were canceled or postponed. Governments are using various mitigation plans and reassessing their development plans and strategies. Their role in International Investment Agreements (IIAs) and attainment of sustainable development goals. IIAs provide the legal predictability and stability to various foreign direct investors, they can also have an impact on contracting parties. Regulatory powers also need to be in place to regulate the public interest due to the constraints to adopting health policies that may affect foreign investors. Therefore, the pandemic will trigger a change in current and future negotiations of international agreements.
According to UNCTAD, the pandemic will trigger a lasting impact on investment policymaking. With the postponement and cancellation of the agreements that were due in 2020, the existing policies will inevitably be affected. Force majeure is also likely to be enforced to avoid laying responsibility on states or investors at a time when they had no control over the condition. For example, the pandemic may reinforce and solidify the trend of restrictive admission measures for various foreign direct investments. The improved restrictions may apply for industries that a host country considers important in their operations. For example, tourism is one of the hard-hit industries after the World Health Organization (WHO) induced travel restrictions to prevent further spread of the virus. Due to the hardships experienced during the pandemic, future investment treaties will inevitably be affected. Countries will be careful in signing agreements due to the lessons they have learned during the health crisis.
Supply chains are disrupted by the pandemic thus prompting governments across the world to prioritize bilateral agreements that will reestablish the trade. They will also strive to attract investments in the hard-hit economies to induce economic recovery. For instance, the health crisis may induce the utilization of online administrative tools to facilitate investments. The economic crisis will thus affect the current and future international treaties since they will focus on boosting the recovery of the economy.
A report by the World Bank shows that Africa and other developing countries will be severely affected the pandemic. The institution estimates that developing countries may face a recession due to a decline in economic growth from 2.4 percent in 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers is -2.1 to 5.1 percent in 2020. Some of the factors leading to an economic crash are the overreliance in exports and travel restrictions. Therefore, the post-pandemic period will witness an acceleration of efforts to adjust their IIAs to ensure the public interest is prioritized. Prioritization may last for several years due to the lasting impact of the health crisis. Therefore, countries will be careful about how they sign international agreements in the future.
According to UNCTAD governments will balance their efforts to incentivize private sector investment since it is crucial in rebuilding the economy. The process will expand the production capacity to enhance economic growth. The incentives also enhance the accessibility and affordability of goods and services to the poor and vulnerable populations. The purpose is to limit the negative effects such high prices that may lead to further stress on the economy. Governments also need to consider improving police power since they are important civil workers in ensuring the health measures are followed. If they are affected countries will lose important people who ensure law and order.
Healthcare measures may also limit the production of goods locally thus limiting the revenue generated across various sectors. The limitations impact the ability of governments to implement their bilateral agreements. For example, most countries have not generated the revenue they expected thus cutting down on various investment budgets. The restrictions are essential to prevent depravity since there is no estimation on when the pandemic will end. The negative impact of the pandemic will also continue past the end of the health crisis. Countries are also careful since previous pandemics lasted between 2-3 years. Therefore, investment decisions should consider the impact of a prolonged period of investment problems.
Bilateral Investment Treaties
Countries are taking drastic measures to curb the negative impacts of the health crisis on the economy. The measures include stimulus programs to boost the economy and prevent the collapse of small businesses. Other measures such as travel restrictions and closure of companies may violate the BIT obligations. One of the major obligations is for states to act non-discriminatorily, yet the obligation may be violated during the pandemic. The reason is that countries are focusing on public interest before foreign investments.
Previous pandemics such as Ebola Virus Disease (EVD) have triggered similar impacts on the economy. Some of the effects include the withdrawal of foreign investors by various companies. The purpose of withdrawing the investors is because the prevailing conditions are not favoring their investment priorities. Governments in the worst-hit regions are unable to observe the BIT agreement obligations. For example, during the current pandemic, governments require extra funds that they did not anticipate in their budgeting. Therefore, they cannot freely observe the BIT obligation to allow free transfer of funds to various investments. Argentina is one of the countries that have previously failed to observe the free foreign exchange of investments. The restrictions by the governments are due to the rising economic hardships.
Fair and Equitable Treatment (FET)
FET involves the regulation of conduct between a host state and foreign investor. Investors pride in the full implementation of FET since it protects all their investments against disturbance by the state. The law is also important in regulating the interests of the states and investors. During the unchartered waters of the pandemic, the level of conflicting results is likely to rise. In some cases, when the host states realize that investments are not favoring their interest they are likely to denounce the relationship. For example, during the pandemic, the world is likely to experience cases similar to Mondev v. U.S.A. The ruling of the case stated that a host country can violate the FET without necessarily acting in bad faith . The reason for the ruling is since FET hangs on various requirements that give the state an upper hand to act indifferently if it is faced by an extreme situation.
Fair and equitable treatment is one of the requirements by nations that are members of a bilateral agreement that they will uphold protection and security to foreign investments. The agreement is being challenged by the health crisis since it has prompted an economic collapse. Therefore, countries are unable to uphold the FET to all the investors. For example, due to failure to uphold FET during the EVD in West Africa, many foreign investors pulled out and stopped their operations. Some of them including ArcelorMittal and London Mining affected the mining industry triggering a 15 percent drop in economic performance. Similarly, during the current pandemic, investors are pulling out and terminating operations to protect their staff and further loss.
Countries consented to the restrictions due to their sovereignty concerning investment regulations. The purpose is to safeguard their freedom of action and freedom to regulate economic activities. One of the aspects of sovereignty is to freely choose the political, social, cultural, and economic system within the barriers of international law. When states were entering the IIAs, they did not want to denounce their sovereignty to pursue public policies that do not enhance states’ interests. Therefore, in light of the elements of FET states may issue economic regulations that may favor or fail to support the interests of investors. States thus feel that it is important to adopt a flexible policy framework that can be adjusted to favor foreign investors. The reason is that more investors will lead to the massive growth of the economy. Some countries form arbitral tribunals to ensure a critical balance between the interests of the investors and the state.
Due to the current pandemic, two scenarios are likely to occur. During the health crisis, countries may not favor international investors since their priority is the citizens. As such, foreign investments may decline with a rise in the number of claims across the world. However, when the pandemic will recede, governments across the world will formulate favorable policies embedded on FET to attract foreign investors. Therefore, the health crisis has altered the current and future international agreements and treaties. It is also important to note that the economic downturn due to the pandemic will require support from foreign investors. For example, countries such as the USA and China will focus their attention on investing in various countries across the world. The purpose is to reap the benefits of the rising economy while the host country will enjoy the luxury of boosting their economic performance.
State of Necessity International Law
The state of necessity involves the legal justification of a state to violate international law while faced by an extreme situation that will require prioritizations of the state’s interest. According to Article 25 of the ILC Articles, the state of necessity is invoked if a state faces grave and imminent peril, the peril threatens interest of the state and the act is the only way to safeguard their interest. Similarly, the pandemic is an imminent peril that threatens the interests of a state. Therefore, the actions of a state will prioritize safeguarding their interest while foreign direct investments and bilateral agreements are secondary. The situation may lead to force majeure where both parties can be freed of any liability due to the extreme situation beyond their control. Therefore, investors and states can expect a surge in the violations since states will prioritize their interests compared to those of foreign investors. In some states in the USA, a new spike in the cases has been reported in over 23 states. The spike means that governments will provide extra stimulus money to boost the economy. They will also require more funds to expand the capacity of the healthcare system. Therefore, they will disregard international obligations for the sake of the interests of the state and the country at large.
International Investment Agreement (IIA)
IIA is a type of treaty between states that protects cross-border investments to support and liberalize economic activities. The purpose of IIA is to boost the confidence and certainty of international investors and to encourage companies to invest overseas. Developing countries have in the past few decades signed various IIA treaties to welcome developed countries and international organizations to invest in their country. However, due to the current pandemic, countries will review their IIA treaties based on the impact that foreign investors are making to their economic growth. Companies that are not supporting growth may not be treated equally as those that are fostering growth. It will also depend on the main economic activity of the countries where foreign companies have made investments. For example, foreign investors in sectors that do not directly support economic growth may receive little support. Therefore, it is likely that in the future, countries will go back to the drawing board to analyze their IIA treaties. The analysis will also affect the other opportunities that will be open to other foreign investors based on the opportunities that will arise.
One of the major areas that will receive much attention in designing IIAs in the healthcare system. Countries have learned their lessons and they want to invest more in health to avoid future challenges in dealing with pandemics. Similar to the priority given to the healthcare expenditure, other projects may be sidelined. For example, direct foreign investments focusing on healthcare infrastructure will receive special attention in government policies. For example, due to the lessons from the health crisis, governments may provide funding and incentives to develop the healthcare infrastructure. International treaties may also focus on developing the capacity of member states to improve their readiness to deal with similar calamities in the future. For instance, several bilateral agreements emerged after previous recessions. Similarly, IIAs will focus on boosting economic growth through foreign direct investments.
One of the great lessons during the coronavirus pandemic is internal production. Countries have learned that they need to boost the ability of their industries to produce goods locally. For example, testing reagents, Personal Protective Equipment (PPE), and ventilators have been crucial in the fight against the pandemic. It is thus a priority in the future bilateral agreements and IIAs. They will encourage investments that boost internal production to minimize overreliance on the imports. Bilateral agreements will also focus on generating job opportunities to solve the mounting crisis of unemployment. Countries such as the United States will prioritize bilateral agreements that will lead to employment opportunities. The reason is that the USA is suffering from over 46 million unemployment cases. For example, agreements will welcome foreign companies to invest in various states to create job opportunities. However, the surge in the number of foreign investments should not override the national interest. The national interest will ensure competition of the local companies is not affected negatively by the foreign companies. They should also avoid interfering with the politics of the country.
Huawei Inc. is one of the Chinese companies that has been denied entry into the United States after years of investment. The reason for the government decided to stop the operations of the company and the sale of their products is because they felt their interests such as national security were at stake. The government accused the company of interfering with its cybersecurity by acquiring data critical to the nation’s security. The introduction of the internet 5-G has thus been halted until the current crisis is resolved. Bilateral agreements will be affected in the same way as countries strive to collaborate with nations that will help them to improve their health capacity compared to taking advantage of them.
Conclusion
International agreements regulate the actions of countries and protect the investments of foreign companies. Countries become members of international treaties to provide a safety net to foreign direct investment. It is important to recognize that the health crisis has triggered an impact on international agreements. The impact is long-term since more countries will violate or review the agreements to prevail in the current pandemic.

Help write my assignment – Bibliography
Journals
Allee T, & Clint P, : Contingent credibility: The impact of investment treaty violations on foreign direct investment (2011) International Organization 401-432.
Bull, A. C., Plahe, J., & Gregory, L. : International Investment Agreements and the Escalation of Private Power in the Global Agri-Food System (2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers) Business Ethics 15
Hartmann, S., & Spruk, R. : The Impact of Unilateral Bilateral Investment Treaties Terminations on FDI: Evidence from a Natural Experiment (2020) SSRN 29
Jung, H. J., & Kim, E. M, : International treaties and foreign direct investment: an empirical analysis of effects of bilateral investment treaties on South Korea’s FDI (2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers) Asia Pacific Economy 16
Lermyte M, :The Fair and Equitable Treatment Principle in Investor-State Dispute Settlement Cases (2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers) Ghent University.
Books
Frenkel, M., & Walter, B.: Do bilateral investment treaties attract foreign direct investment? The role of international dispute settlement provisions. (2nd rev edn OUP 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers)
Sirr, Gordon, John Garvey, and Liam A. Gallagher: Bilateral investment treaties and foreign direct investment: Evidence of asymmetric effects on vertical and horizontal investments. (6th rev edn OUP 2017)
Vandevelde, Kenneth J.: The first bilateral investment treaties: US postwar friendship, commerce, and navigation treaties. (Oxford University Press, 2017)

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