(133) The inclusion of the Hull Doctrine in the BITs by Argentina and El Salvador are particularly suggestive of a trend toward adoption of the Hull Doctrine because it was precisely these Latin American countries that resisted the Hull Doctrine in favor of the Calvo Doctrine during the era of decolonization.
First, "the primary purpose of BITs is to promote foreign investment" and the Hull Doctrine is more favorable to investor interests than the Calvo Doctrine. (135) Second, "capital-exporting states drove the movement to enter BITs, and they understandably sought to have the language of these treaties be in terms most favorable to their citizens." (136)
In addition to BITs, international arbitral awards have overwhelmingly favored investors by requiring states that have expropriated property to pay "prompt, adequate, and effective compensation." (159) The adoption of the Hull doctrine in these arbitral awards, however, is not demonstrative of a recent shift away from the Calvo doctrine. Arbitral Awards even in the 1970s adhered to the Hull doctrine's idea of full compensation.
At least prima facie it seems that "equality is the central tenet of the Calvo Doctrine." (31) As Paparinskis noted, "[p]robably largely motivated by the abuse of gunboat diplomacy by the Western home States, the Calvo Doctrine relied on the equality of States to argue that ...
(26.) In a diplomatic note to the United States, in 1902, Luis Maria Drago, the Argentine Minister of Foreign Affairs, proclaimed the Drago Doctrine principle, which differed from the Calvo Doctrine, that "public debt cannot give rise to armed intervention or even to the material occupation of the soil of American nations by a European Power." Luis Maria Drago, State Loans in their Relation to International Policy, 1 Am.
(27.) ANGHIE, supra note 5, at 209; Rodrigo Polanco Lazo, The No of Tokyo Revisited: Or How Developed Countries Learned to Start Worrying and Love the Calvo Doctrine, ICSID Rev.
Similar to the argument that the Calvo doctrine is unfair to the
Treaties and the Use of Treaties Against the Calvo Doctrine
This goes hand in hand with the Calvo doctrine, as both theories dictate
The Calvo Doctrine, named after Argentine jurist Carlos Calvo, espouses two notions that are based on variations of the sovereignty principle.(23) First, like the principle of national treatment incorporated into the GATT(24) and the NAFTA,(25) the Calvo Doctrine espouses equality of treatment between foreign citizens and citizens of the host country.(26) Unlike concepts of national treatment, however, the Calvo Doctrine was created to address the perceived favoritism granted to foreigners, rather than discrimination, against them.(21) In other words, the purpose of the Calvo Doctrine is to bring foreigners down to the level of nationals, while the purpose of national treatment is to raise them up to the level of nationals.
As an increasing number of Latin American governments have adopted the "Washington consensus" prescribing free trade and openness to foreign investment,(30) the Calvo Doctrine has been weakened as a guiding principle.(31) Nevertheless, the doctrine still holds some power.
According to one commentator, international developments such as the NAFTA "raise many critical questions about the continued validity of the Calvo critical questions about the continued validity of the Calvo Clause...."(35) Specifically, the investment provisions in Chapter 11 of the NAFTA -- the commitment in Article 1110 for prompt payment of fair market value on expropriation of foreign-owned property(36) and the referral of investment disputes to international arbitration(37) -- challenge the vitality of the Calvo Doctrine. As the American republics vie for foreign investment, the Calvo Doctrine is expected to weaken.