The development of international trade and investment agreements requires not only to simply regulating cooperation in a narrow trading (export-import) sense, but also regulating the economic and social aspects widely. The wider regulation of international trade and economic cooperation agreements will create widespread impact on public policy spaces. This is not only related to the potential threat of injustice in economic development, but also to the fulfillment social and economic rights being threatened as a consequence of the narrowing policy space which is taken hostage by the investor state dispute settlement mechanism. In terms of this, the state sovereignty is at stake.
The deepening of economic liberalization regulated in the current Mega-FTA models, both within TPP, RCEP, EU CEPA, and TTIP, is in attempt to maintain the domination position of corporate power which is also strengthened by the monopolistic rules for multinational corporations. At the end, these rules create injustice in development for the host-country.
The establishment of international trade norms have undermined the legitimacy of the State, which led to a normative problem for State responsibility in providing protection and fulfillment for human rights. The role of States in turn has been replaced by the strengthening of global institutions susceptive to multinational corporations’ interests.