BITs represent foreign trade policy shift for Brazil

Subject

Brazil's shifting foreign trade policy.

Significance

Although Brazil signed a dozen Bilateral Investment Treaties (BITs) in the 1990s, they never came into effect. Since then, Brazil has steadfastly opposed participation in the network of BITs currently in force, addressing foreign investment protection through domestic legislation and international instruments such as double taxation treaties. However, in April, Brazil concluded investment agreements with Mozambique and Angola and is negotiating others. This is a major shift in foreign investment policy and also sets the stage for a new form of BIT that may be attractive to other emerging countries.

Impacts

• How these vaguely worded BITs will work out in practice is still to be determined.
• Coverage of intellectual property rights and sovereign debt as protected investments is uncertain.
• Private sector and civil society involvement is a novel feature that could be included in future BITs.