The Trump Administration’s imposition of steep and discriminatory tariffs on much of the world with which the United States trades is often seen as a fundamental attack on the World Trade Organization (WTO), which may not survive unless extreme measures are taken, such as the removal (or voluntary withdrawal) of the United States from the WTO. This article questions this narrative, arguing that there are strong reasons to believe that the WTO has the resilience to survive and evolve despite the tension between the transactional power politics of trade and the values of legalism and non-discrimination that are emblematic of the multilateral trading system embedded in the WTO. A historical perspective reveals that the multilateral trading system has always been confronted with gaps between the ideology and ideals surrounding trade multilateralism and, on the other hand, the reality of the system, where rules and their enforcement are shaped by power and where non-discrimination is often honored in the breach. The system has adapted and accommodated to power politics. Proposals to remove the United States from the WTO would themselves constitute violations of international law, as the WTO constitution or charter does not contain any provision for expulsion of a WTO Member, much less any objective criteria for so doing. In recent years, the WTO has pivoted to new roles and agendas—generally under the rubric of inclusive trade—that deviate from the rule creation and enforcement through dispute settlement focus that many observers still see as the entire basis for the WTO’s existence. It is more equipped to withstand the current trade winds and to ride the waves than is appreciated by those with nostalgia for days when the WTO was widely seen as the poster child for neoliberal globalism in a neoliberal era, as well as for the post-Cold War liberal narrative of the global rule of law.

In recent decades, there has been an increasing trend of foreign investors challenging host states’ taxation measures in international investment arbitrations, arguing that host states have violated investment protection standards, including the widely recognized standard of non-discrimination. In international investment treaties, the non-discrimination standard is scattered between five different types of protection standards, including the national treatment standard, the most-favored nation treatment standard, the non-impairment clause, the fair and equitable treatment standard, and the expropriation clauses. Due to the overlapping status of non-discrimination elements among treaty protection standards, the meaning and scope of the non-discrimination standard were never clearly defined. Additionally, because taxation measures closely relate to states’ inherent sovereign power to tax, there are extensive debates regarding the criteria for determining the finding of an investment treaty obligation violation and the need to balance states’ sovereign power to tax with protection of foreign investors’ investment interests. This article analyzes the quandary between sovereign taxation power preservation and foreign investment protection, examines non-discrimination standards in different treaty protection standards, assesses the jurisdiction hurdles for application of non discrimination standards, and then presents an extensive case study of the arbitral precedents of Investor–State Dispute Settlement cases involving non-discrimination claims targeting the host states’ taxation measures. To address the challenge of inconsistent and diverging approaches to applying and interpreting non discrimination standards against taxation measures, this article proposes a redefined “Three-Prong” test to harmonize the chaos in existing jurisprudence. The Three-Prong test aims to establish a consistent methodology for determining the discrimination treatment standard applicable to all types of discriminatory treatment in international investment law and to balance the competing interests of sovereign taxation power and foreign investment protection.