Investor-state dispute settlement (ISDS) has been criticised for being an ‘asymmetric’ legal regime. Investors can hold host states liable before domestic courts and through ISDS. By contrast, local communities and individuals of the host state affected by foreign investors and non-governmental organisations defending the public good (together referred to as third parties) can hold investors liable before domestic courts only. The Investment Court System in the EU-Canada Comprehensive Economic and Trade Agreement and the Multilateral Investment Court (MIC) are reformed models of ISDS. However, they reflect the ‘asymmetric’ structure of traditional ISDS by precluding third parties from bringing claims against investors whose investments have affected their rights under European Union law. This chapter proposes institutionalising third-party claims in the future MIC either based on an investor’s breach of domestic law through legality clauses, or based on an investor’s failure to draw a social and environmental impact assessment of its investment in the territory of the host State through environmental, social and governance clauses.

Progress towards gender equality and women’s empowerment (UNSDG 5) is evidently off-track. According to UN data, women are 30% less likely to participate in the labour market, make up 60% of the informal economy, earn 30% less than men and bear three times the amount of unpaid labour. Trade policies could be an important tool to counter these persisting gender inequalities in the economic sphere, e.g. by eliminating discriminatory taxes (so-called ‘pink tariffs’), creating formal and higher-paying jobs for women, ensuring labour rights compliance in high-risk feminised labour sectors (e.g. textiles) or supporting women-owned businesses. But because trade policies do not sufficiently account for the fact that trade affects women differently than men, they tend to reinforce existing gender gaps. According to economic analysis, closing these gaps would give the global economy a USD 7 trillion boost.

The EU is constitutionally obliged to promote gender equality and pledged to use trade policy to eliminate gender inequalities within the Member States and in third states.This political impetus has led to the integration of trade and gender equality chapters/clauses into EU free trade agreements (FTAs) and compliance requirements with international women’s rights conventions in unilateral EU trade instruments. Yet, research suggests that the EU’s current efforts are nor far-reaching enough. That research does however not show how the legal design of EU trade instruments needs to be changed to improve the state of the art.

Against that background, this paper aims to demonstrate the legal opportunities and pitfalls for enhancing women’s economic empowerment through EU trade policy and, on that basis, develop some legal solutions to improve the state of the art. It is structured as follows: On the basis of social science literature, the first section conceptualises women’s economic empowerment with a view to developing feasible targets to be pursued by EU trade policy. The second section offers a doctrinal legal analysis of 10 EU FTAs and 5 unilateral EU trade instruments examining how women and their economic empowerment have been considered in the legal framework of these instruments. The third section will critically analysis the legal opportunities and pitfalls for enhancing women’s economic empowerment through these instruments. The conclusions will offer some legal solutions for enhancing women’s economic empowerment through the legal design of EU trade policy instruments.

The modes of economic governance vary from country to country, but legal traditions play an important role. Approaches to economic governance differ significantly between the EU, which has a civil law system, and the US, which has a common law system. In many economic issue areas, the EU prefers top-down across-the-board type of governance that incorporates fundamental values of the civil law system. The US, on the other hand, prefers bottom-up, flexible, case-by-case type of economic governance, which is in line with the core values of the common law system. The two sides have very different approaches to various economic related issue areas, such as intellectual property, services, and investment. They often cannot agree upon the fundamental goal of economic governance, such as what to govern (regulate) and how to govern (regulate), which had led to the deadlock of international negotiations such as the WTO Doha Round. The conflict between the EU and the US over economic governance has global implications. Many countries in Latin American (such as Brazil), countries around the EU (such as Turkey) and possibly China would prefer the civil law type of economic governance. The UK, some countries in the Asia Pacific (such as Australia and Singapore) and possibly India would join the latter group because of their common law traditions. There is a risk that the global economic governance will become divided in terms of legal traditions rather than democratic values.