[CTC] Industry groups urge administration to prioritize ISDS, IP protection in new NAFTA

[Arthur Stamoulis]

INSIDE US TRADE


Industry groups urge administration to prioritize ISDS, IP protection in
new NAFTA

August 08, 2017

Major industry groups are urging the Trump administration to reinforce the
investor-state dispute settlement mechanism and intellectual property
enforcement provisions in an updated North American Free Trade Agreement,
arguing that doing so would bolster market access and investment protection
for U.S. companies.

In an Aug. 8 letter
<https://insidetrade.com/sites/insidetrade.com/files/documents/aug2017/wto2017_0263a.pdf>
to
top administration officials, the Coalition of Services Industries, the
National Association of Manufacturers, the U.S. Chamber of Commerce and
roughly 100 other industry groups argued in favor of the dispute-settlement
mechanism, contending the tool offers U.S. entities a “neutral arbitration
system.”

The groups called ISDS enforcement a “core element” used to protect U.S.
investments overseas.

“Unlike other provisions of a trade agreement that can typically be
enforced through more generalized dispute settlement systems, individual
investments are impacted uniquely by foreign government actions and require
a specialized, dependable, targeted and neutral form of enforcement,” the
letter states.

They added that ISDS provisions are “highly valuable” and have already
aided “U.S. businesses that have faced the seizure, theft and mistreatment
of investments in both Canada and Mexico.”

House Democrats have staunchly opposed ISDS, arguing it encourages U.S
companies to shift production offshore. Meanwhile, both Canadian and
Mexican officials have insisted on the tool's inclusion in an updated deal.
Trade analysts say a push to eliminate ISDS from the updated deal could prolong
or even torpedo the talks <https://insidetrade.com/node/159495>*.*

Sent to U.S. Trade Representative Robert Lighthizer, Commerce Secretary
Wilbur Ross, Treasury Secretary Steven Mnuchin, Secretary of State Rex
Tillerson and National Economic Council Director Gary Cohn, the letter says
the investor-state dispute settlement provisions belong in the deal as they
protect against the “seizure, theft and mistreatment of investments in both
Canada and Mexico.” Citing an undefeated record for the U.S. in ISDS cases
brought against it, the groups also noted the U.S. use of the tool in “40
cases with Canada and Mexico, winning several to ensure compensation when
those governments have taken unfair actions against American investment.”

The groups identify what they call “significant gaps” in enforcement
mechanisms and call the NAFTA renegotiation an “important opportunity” to
upgrade such provisions.

Specifically, the coalition calls for expanded access to ISDS tools “for
breaches of major investment contracts” and to guarantee that “all sectors
are afforded the same protections and access to ISDS to enforce those
protections” in the modernized deal.

They also request an extended “enforcement period” to at least 10 years
“after any potential termination of the agreement” to ensure U.S.
investment is “fully protected.”

The coalition also wants stronger protection of intellectual property and
enhanced disciplines against forced technology transfers to be prioritized
in the updated NAFTA.

Last week, the Office of the U.S. Trade Representative was expected to
initiate a Section 301 investigation, under the Trade Act of 1974, into
Chinese forced technology transfer policies, sources told *Inside U.S.
Trade. *But sources say the announcement was delayed “indefinitely” because
the action was vetoed by the State Department as the Trump administration
tries to work with Beijing to counter North Korean aggression.

Other signatories of the letter include the National Foreign Trade Council,
National Retail Federation, the Semiconductor Industry Association, the
Business Roundtable, the American Insurance Association and the American
Petroleum Institute. --*Isabelle Hoagland *(isabelle.hoagland at iwpnews.com)

---

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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