My simple thesis, which I hope that this sophisticated audience will not find simplistic, is this: Customary international law governing the treatment of foreign investment has been reshaped to embody the principles of law found in more than two thousand concordant bilateral investment treaties. With the conclusion of such a cascade of parallel treaties, the international community has vaulted over the traditional divide between capital-exporting and capital-importing states and fashioned an essentially unified law of foreign investment.

For some two hundred years, the international community was divided over what law governed the treatment of foreign investment and over the content of that law. In large and loose terms, capital-exporting countries maintained that international law, which indisputably related to the treatment of aliens, related to the treatment and taking of their property as well. The standard of that treatment could not lawfully fall below the minimum standard of international law. If the property of a foreigner was expropriated by a State, the expropriation was lawful only if it was for a public purpose, not discriminatory, and accompanied by the payment of prompt, adequate and effective compensation.

Capital-importing countries tended to have another perspective. The foreign investor was governed by the law of the host State and the remedies afforded by that law alone; he was entitled to no more than national treatment, the treatment accorded by the host State to the investments of its own nationals.