[CTC] Lighthizer: ISDS, sunset proposals will have ‘unified’ administration backing

[Arthur Stamoulis]

INSIDE US TRADE
 
Lighthizer: ISDS, sunset proposals will have ‘unified’ administration backing

September 27, 2017
OTTAWA – When controversial ideas for investor-state dispute settlement and a sunset clause tied to the trade deficit are finalized and proposed at the fourth round of NAFTA talks they will have the full backing of all agencies within the administration, U.S. Trade Representative Robert Lighthizer said after the third round of NAFTA talks wrapped up here.
 
USTR tabled controversial proposals on government procurement and parts of the investment chapter in Ottawa despite some government agencies' objections to them, sources said. Inside U.S. Trade reported on Wednesday that USTR officials shared those proposals, along with text on dispute settlement and a sunset clause, with the congressional committees of jurisdiction even though some agencies had been opposed to moving forward <https://insidetrade.com/node/160409> with them, leaving some to question whether the interagency process was broken.
 
But Lighthizer told reporters that “all the provisions we’ve put forward are unified administration proposals, one hundred percent, every one without exception.”
 
Asked about ISDS and the sunset clause in particular, Lighthizer added, “We’ve talked about those conceptually; we haven’t put the text forward. When we put them forward they’ll be unified too.”
 
He added that those proposals, along with text on auto rules of origin, would be tabled at the fourth round, set for Oct. 11-15 in the Washington, DC, area.
 
Lighthizer said the negotiating teams have talked about auto rules of origin at a conceptual level and have already done some negotiating and “a lot of sort of socializing,” adding that USTR “should have text before the next round.”
 
The U.S. Trade Representative also said that labor provisions in a new NAFTA would be treated the same as other provisions with regard to dispute settlement, but would not say if the U.S. was pushing for binding dispute settlement in a modified agreement.
 
“We are still in the process of negotiating on dispute settlement, so I don’t want to talk about the specific provision,” Lighthizer told reporters. “I will say that labor will be treated exactly like every other provision. There is not going to be a situation where labor is a second-class citizen, which is something they’re worried about.”
 
“The exact details of how the dispute settlement process works is something that’s under negotiation,” he added, “but we’re not going to treat this provision differently than any other.”
 
Pressed on how labor rules could be enforced without a binding dispute settlement mechanism, Lighthizer said “the details of the mechanism are something that we’re in the process of working out.”
 
The U.S. tabled labor text here that sources say is very similar to the Trans-Pacific Partnership labor chapter and that one source described as “underwhelming.” The proposal has been met with disapproval by Democrats in Congress.
 
A USTR spokeswoman, in a statement on the proposal, said it “replaces the original NAFTA's toothless approach on labor with enforceable provisions to benefit workers across America.”
Lighthizer said the U.S. and Mexico are exploring ways to increase wages in Mexico, although the U.S. does not have specific numbers in mind.
 
Lighthizer would not commit to talks concluding by the end of the year, as the U.S. and Mexico have said they hope will happen. He said that goal is “very, very optimistic, very, very difficult, but there are reasons to do it. So when there are reasons to do it we have a lot of motivation, so I can’t make that prediction. I’m hoping that we can do it.”
 
He said renegotiations create more business uncertainty than negotiations on a new agreement, which has real impacts in all three countries.
 
Failure to reach agreement on a NAFTA 2.0, he added, could cause the U.S. to walk away from the deal altogether.
 
“So there’s a lot of pressure on us,” Lighthizer said. “We’re going around the clock as fast as we can. At some point you find out whether you can have a deal. If you don’t have a deal, you don’t have a deal and you just walk away from it and there are uncertainties and problems with that.” – Jack Caporal (jcaporal at iwpnews.com <mailto:jcaporal at iwpnews.com>)
 
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