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U.S. Department of State

Diplomacy in Action

Bilateral Investment Treaties and Related Agreements

The United States negotiates BITs on the basis of a model. The Department of State and the Office of the United States Trade Representative (USTR), working with other U.S. government agencies, completed an update of the U.S. model bilateral investment treaty in April 2012: the 2012 U.S. Model BIT Text. (A press release and fact sheet are also available.)

The U.S. Bilateral Investment Treaty (BIT) program supports several key economic policy objectives from protection of investment interests overseas to promotion of market-oriented policies and exports.

The BIT program's basic aims are to:

  • Protect investment abroad in those countries where investors' rights are not already protected through existing agreements (such as modern treaties of friendship, commerce and navigation, or FTAs);
  • Encourage the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory way; and
  • Support the development of international law standards consistent with these objectives.

U.S. Bilateral Investment Treaties provide investments with six basic benefits, which we often refer to as the "core" BIT principles:

  • First, our BITs provide that investors and their "covered investments" (that is, investments of a national or company of a Party in the territory of the other Party) are entitled to be treated as favorably as the host Party treats its own investors and their investments or investors and investments from any third country. The BIT generally affords the better of national treatment (NT) or most favored nation (MFN) treatment for the full life cycle of investment, i.e., from its establishment or acquisition, through its management, operation and expansion, to its disposition.
  • Second, BITs establish clear limits on the expropriation of investments and provide for payment of prompt, adequate and effective compensation when expropriation takes place.
  • Third, BITs provide for the transferability of funds into and out of the host country without delay using a market rate of exchange. This covers all transfers related to a covered investment and creates a predictable environment guided by market forces.
  • Fourth, the circumstances in which performance requirements can be imposed are limited. The performance requirement disciplines apply to specific circumstances that would require covered investments to adopt inefficient and trade distorting practices (e.g., local content requirements or export quotas) as a condition for establishment, acquisition, expansion, management, conduct, or operation.
  • Fifth, BITs give investors from both Parties the right to submit an investment dispute with the treaty partner's government to international arbitration. There is no requirement to use that country's domestic courts.
  • Sixth, BITs give covered investments the right to engage the top managerial personnel of their choice, regardless of nationality.

Responsibility for BIT policy and negotiations is shared by the State Department and USTR. Points of contact are:

  • Bilateral Investment Treaty Coordinators at the State Department, Bureau of Economic and Business Affairs, Office of Investment Affairs: 202-736-4060 or 202-736-4907; and
  • USTR, the Office of Services, Investment, and Intellectual Property: 202-395-9679.

Investment Provisions in Free Trade Agreements:

USTR Site for Free Trade Agreements

BIT Documents:

-United States Bilateral Investment Treaties
-2012 U.S. Model Bilateral Investment Treaty  [256 Kb]
-NAFTA Investment


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