This paper analyzes critical opinions about investor-state arbitration (ISA) in relation to investment treaties concluded by Japan, with particular emphasis on the Trans-Pacific Partnership (TPP) negotiations. Japan has concluded 28 investment treaties, along with 12 economic partnership agreements (EPAs) that each contain a chapter on investment, and is a party to the Energy Charter Treaty. Currently, Japan is negotiating more than 20 bilateral investment treaties (BITs) and EPAs that include investment chapters. Japan has also signed the TPP.
Against ISA, in particular in relation to the TPP negotiations, a number of familiar criticisms have been addressed: ISA infringes on state sovereignty; it is unconstitutional; it unduly restricts regulatory space; and it unduly restricts government procurement. However, these elements cannot be the real cause of opposition to ISA itself. Although these criticisms, if valid, should apply to all of Japan’s investment treaties, the Diet continues to approve other BITs and EPAs with unanimity or by an overwhelming majority, and public opinion continues to be indifferent to investment treaties other than the TPP. The complete lack of discussion concerning ISA being included in treaties with Switzerland and the Republic of Korea, as well as during the EPA negotiations with the European Union, indicates that few people believe that ISA with developed states is unnecessary or problematic. What makes the TPP appear problematic is the presence of the United States, as it is perceived that Japan may well be brought to arbitration by US investors.