[CTC] US business leaders warn Trump to keep ISDS

[Arthur Stamoulis]

http://globalarbitrationreview.com/article/1145444/us-business-leaders-warn-trump-to-keep-isds <http://globalarbitrationreview.com/article/1145444/us-business-leaders-warn-trump-to-keep-isds>
US business leaders warn Trump to keep ISDS

Tom Jones <http://globalarbitrationreview.com/author/profile/1000377/tom-jones>
09 August 2017

While Donald Trump focuses his attention on North Korea, US business leaders have written to key members of his administration warning that investor-state dispute settlement should be "maintained and upgraded" as part of the renegotiation of the North American Free Trade Agreement.

In an open letter <http://documents.nam.org/COMM/Business-Letter-on-ISDS-in-NAFTA-2017-08-08.pdf?_ga=2.252476620.411711523.1502215933-340315665.1502215933> sent yesterday, over 100 trade associations representing millions of companies across the US urged US Trade Representative and Skadden Arps Slate Meagher & Flom partner Robert Lighthizer and Secretary of State Rex Tillerson to ensure that ISDS remains a high priority.

"As associations representing millions of small, medium and large companies across every major sector of the US economy […] we urge that robust market access commitments and investment protections, enforceable through investor-state dispute settlement, be maintained and upgraded in the negotiations," the associations write.

"The original NAFTA includes basic access, protection and enforcement provisions that have helped grow manufacturing, services and agricultural industries by enabling our businesses to reach new consumers and to participate in foreign infrastructure, energy and resource development projects. The negotiations to modernise NAFTA provide an important opportunity to upgrade the agreement to improve protection and enforcement tools against the theft, discrimination and unfair treatment of US property overseas."

US businesses that invest overseas are "outsized participants in the US economy," they say, more successful than pure home turf players because of their access to foreign markets.

"Indeed US companies that invest overseas are America's largest exporters, biggest producers, largest innovators and investors in US capital expansion and highest-paying employers".

The associations describe the existing ISDS provisions in NAFTA as "highly valuable" - noting they have already helped many US businesses with investments in Canada and Mexico. The US has only faced 18 cases under NAFTA and has won every single one of them, they say, while US investors have invoked ISDS provisions in 40 cases with Canada and Mexico, winning several.

However, they say that while NAFTA retains baseline investment protection and enforcement provisions, there are "significant gaps" which do not provide "full coverage" to all sectors or full enforcement. 

The letter makes a number of suggestions for improvement as part of the "NAFTA modernisation", such as ensuring intellectual property is defined as a "protected investment" and guaranteeing that all sectors are afforded the same protections and access to ISDS.

It also requests improved US investment access in Canada and Mexico on a non-discriminatory basis, and greater access to ISDS enforcement for breaches of major investment contracts.

It further suggests extending the enforcement period of ISDS provisions to at least 10 years after any potential termination of NAFTA, to "ensure that American investment is appropriately and fully protected."

Playing to the Trump administration's "America First" policy, the associations suggest that NAFTA's provisions to protect overseas investment, enforceable through ISDS, are in line with "several of the private property protections already found in the US constitution and US law, including due process, non-discrimination, fair treatment by the government and compensation for the seizure of property."

They also suggest US investors are likely to be subject to "theft" or subject to unfair treatment abroad.

The future of NAFTA and its ISDS provisions have long been seen as in jeopardy under a Trump presidency. During his campaign, the billionaire property magnate and former host of The Apprentice promised to "tear up" the agreement, which he blamed for lost jobs and low wages in the US, and described it as "the worst trade deal maybe ever signed anywhere but certainly ever signed in this country."

However, since becoming president Trump has stepped back from his earlier threats to withdraw from the agreement, instead electing to "bring NAFTA up to date through renegotiation".

Last month, Lighthizer released <http://globalarbitrationreview.com/article/1144686/nafta-negotiations-us-signals-will-keep-isds> an 18-page summary of the state's negotiating priorities, which indicated an intention to keep ISDS in its current form. Given Canada and Mexico's experience of NAFTA cases - which has included defeats - they may be less keen and may use the negotiations to seek to amend the regime.

The letter was addressed to Lighthizer, Tillerson and three other key members of the Trump administration; Director of the National Economic Council Gary Cohn, Secretary of Commerce Wilbur Ross and Secretary of the Treasury Steve Mnuchin.

A full list of the trade associations behind the letter is below.

Supporting trade associations:

Air-Conditioning, Heating & Refrigeration Institute
American Fuel & Petrochemical Manufacturers
American Apparel & Footwear Association
American Beverage Association
American Business Conference
American Chemistry Council
American Coatings Association
American Council of Life Insurers
American Exploration & Production Council
American Fiber Manufacturers Association
American Forest & Paper Association
American Frozen Food Institute
American Insurance Association
American Petroleum Institute
American Wire Producers Association
Arizona Chamber of Commerce and Industry
Arkansas State Chamber of Commerce
Associated Equipment Distributors
Associated Industries of Massachusetts
Associated Industries of Missouri
Association of Equipment Manufacturers
Association of Metro Counties
Biotechnology Innovation Organization
Bloomington/Normal Economic Development Council
Border Trade Alliance
Brick Industry Association
Business Roundtable
Coalition of Services Industries
Columbus Area Chamber of Commerce
Consumer Specialty Products Association (CSPA)
Corn Refiners Association
Council of Industry of Southeastern New York
Council of the Americas
Council of the Great Lakes Region Distilled Spirits
Council of the United States, Inc.
Express Association of America
Fabricators and Manufacturers Association, International
Florida Chamber of Commerce
Florida State Hispanic Chamber of Commerce
Forestry Association of South Carolina
Glass Packaging Institute
Greater North Dakota Chamber of Commerce
Greater Seymour Chamber of Commerce
Grocery Manufacturers Association
Illinois Manufacturers' Association
INDA, Association of the Nonwoven Fabrics Industry
Independent Petroleum Association of America
Indiana Chamber of Commerce
Indiana Hardwood Lumbermen's Association, Inc.
Indiana Manufactured Housing Association-Recreation Vehicle
Indiana Council Indiana Manufacturers Association
Indiana Retail Council
Industrial Truck Association
Information Technology Industry Council
International Housewares Association
International Wood Products Association
Investment Casting Institute
Iowa Association of Business and Industry
IPC - Association Connecting Electronics Industries
Jackson Area Manufacturers Association
Louisiana Association of Business & Industry
Michigan Premium Cigar and Pipe Retailers Association
Minnesota Chamber of Commerce
Missouri Chamber of Commerce and Industry
Montana Chamber of Commerce
Montana Manufacturing Association
Motor & Equipment Manufacturers Association
National Association of Manufacturers
National Association of Real Estate Investment Trusts
National Confectioners Association
National Council of Textile Organizations
National Electrical Manufacturers Association
National Foreign Trade Council
National Oilseed Processors Association
National Retail Federation
ND Association of Plumbing, Heating & Mechanical Contractors
Nevada Mining Association
New Mexico Association of Commerce and Industry
Next Generation Manufacturing NH Business & Industry Association
North Carolina Chamber
Northeast PA Manufacturers & Employers Association
Ohio Licensed Beverage Association
Ohio Manufacturers' Association
Outdoor Advertising Association of Indiana
Outdoor Power Equipment Institute, Inc.
Personal Care Products Council
Petroleum Equipment and Services Association
Petroleum Equipment Institute
Pharmaceutical Research and Manufacturers of America
Plastics Industry Association
Recreation Vehicle Industry Association
Resilient Floor Covering Institute
Rhode Island Manufacturing Association
San Antonio Manufacturers Association
Securities Industry and Financial Markets Association
SEMI Semiconductor Industry Association
South Carolina Chamber of Commerce
St. Joseph Chamber of Commerce
Texas Association of Business
Texas Association of Manufacturers
Texas Oil and Gas Association
United States Chamber of Commerce
United States Council for International Business
Valley Industrial Association
Vinyl Institute
Virginia Chamber of Commerce
Virginia Forestry Association
Washington Farm Bureau

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