[CTC] House Democrats call on administration to use APEP to remove ISDS from trade deals

Tue Jul 23 08:04:26 PDT 2024

House Democrats call on administration to use APEP to remove ISDS from trade deals
Inside US Trade
By Jason Asenso | July 22, 2024
Americas Partnership for Economic Prosperity countries should consider removing investor-state dispute settlement provisions from trade deals with the U.S., a group of nearly 50 House Democrats say.

In a July 20 letter <https://insidetrade.com/sites/insidetrade.com/files/documents/2024/jul/wto2024_0761a.pdf> to U.S. Trade Representative Katherine Tai, the 46 Democrats urged the administration to “establish a working group or similar forum” within the APEP trade track to “explore pathways towards eliminating ISDS from any trade or investment agreements to which the U.S. and APEP partner countries are party.” USTR last month solicited feedback <https://insidetrade.com/node/180363> on the trade track. Comments are due Monday.

Signatories include House Ways & Means Committee members Lloyd Doggett (TX), Linda Sánchez (CA) and Dan Kildee (MI), as well as many Congressional Progressive Caucus members including Chair Pramila Jayapal (WA) and member Ro Khanna (CA). The letter was also sent to Secretary of State Antony Blinken.

The lawmakers call for the U.S. to use the trade track to address ISDS rules that “plagu[e] U.S. free trade agreements (FTAs) and bilateral investment treaties (BITs) with Latin American countries,” charging that ISDS undermines countries’ ability to protect the environment and their people.

The Biden administration has suggested ISDS mechanisms will not be part of its future agreements because they risk threatening progress on labor, health and environmental protections. Such measures are part of more than 50 of the U.S.’ FTAs and BITs.

“Corporations’ ISDS complaints are not adjudicated through judicial systems of the United States or our trade partners, but instead by industry-friendly arbitration tribunals,” the letter reads. “These panels – made up of trade lawyers who often adjudicate cases one day, then argue cases on behalf of corporations the next – can require governments to pay enormous sums to foreign investors with no recourse to appeal.”

Tai has stated that she and President Biden do not “believe corporations should receive special tribunals in trade agreements that are not available to other organizations” or have the ability to “attack labor, health, and environmental policies through ISDS,” the lawmakers write, citing Tai’s response <https://ielp.worldtradelaw.net/2024/06/the-biden-administrations-position-on-isds-removal.html> to a May 2023 letter <https://insidetrade.com/node/176795> urging the administration to drop ISDS from all U.S. trade deals.

“Over the years, corporations have used ISDS claims, or the threat of them, to hold governments ransom for egregious amounts of money unless they roll back domestic policies aimed at protecting consumers, the environment, Indigenous communities, and more,” they add, noting that ISDS tribunals have awarded investors $113.87 billion so far.

The U.S. has FTAs or BITs with nine of its 11 APEP partners, the lawmakers continue, relaying a number of issues Western Hemisphere stakeholders in APEP countries have with ISDS.

Ecuadorian citizens in April voted to exclude an article from the country’s constitution that would have allowed it to “once again participate in international arbitration mechanisms such as ISDS,” the letter reads.

More than 80 Colombian organizations and 54 members of the Colombian Congress last May joined a group of nearly 300 organizations in issuing a declaration <https://terra-justa.org/dc_2017/wp-content/uploads/2023/02/Statement-recover-Colombian-Sovereignty-in-Defense-of-Water-Life-and-Territories-May-2023-1.pdf> calling on Bogotá to review its ISDS pacts “with the aim of eliminating the ISDS mechanism,” it adds, citing the declaration.

The lawmakers' letter quotes Ivette González, the strategy engagement and advocacy director at the human rights group PODER, as saying ISDS “not only harms States in Latin America economically” because of money awarded to companies via ISDS tribunals but also impacts country’s “capacity to protect the rights of its citizens and residents, and to take action in the public interest.” The “misuse” of ISDS is “widespread in our region and, instead of being a space to solve commercial disputes, it has become a perverse system to put profit over people and the planet, and for corporations to exert undue influence over State decision making processes,” González added.

Eliminating ISDS from U.S. trade arrangements has been a key issue for progressive lawmakers and civil society groups.

Several prominent environmental and progressive groups last week released a joint comment <https://insidetrade.com/node/180616> on APEP’s trade track calling for any deals negotiated under the pact to “be used as an opportunity to further eliminate Investor-State Dispute Settlement (ISDS) rules where they still exist.” They also called for any such deal to ensure critical mineral “circularity” and advance sustainable development among partner countries, according to the joint comment <https://insidetrade.com/sites/insidetrade.com/files/documents/2024/jul/wto2024_0720a.pdf>.

A group of 41 Democratic House and Senate lawmakers last November pressed the Biden administration to leverage APEP to eliminate ISDS from U.S. trade deals <https://insidetrade.com/node/178293>.

Public Citizen, a left-leaning advocacy group that also signed the joint comment issued by the environmental groups, last week issued its own submission on the trade track. In it, the group argues that APEP mist be a forum for partners to “repair the damage from past U.S. trade policy in the Western [H]emisphere,” particularly harms as the result of ISDS, the July 19 submission <https://www.citizen.org/article/comment-for-the-record-to-the-united-states-trade-representative-on-the-americas-partnership-for-economic-prosperity-trade-track-docket-number-ustr-2024-0009/>, reads.

ISDS is an example of U.S. trade policies in the region that “prioritized the profit of U.S. corporations over the wellbeing of communities, workers, democracy, and human rights,” the group contended.

To ensure APEP countries make progress in areas like the rule of law, labor, human and environmental rights, “negotiators must use this opportunity to address the harmful legacy of ISDS,” Public Citizen said. “Otherwise, APEP risks failing to deliver on the ambitious, shared values that member states have agreed upon.”

On Monday, Public Citizen's Global Trade Watch Director Melinda St. Louis issued a statement <https://www.citizen.org/news/apep-should-be-used-to-eliminate-isds-say-members-of-congress-u-s-and-latin-american-civil-society/> saying it was “empowering to see members of civil society and elected officials proposing actionable solutions to address damages done by decades of corporate trade in the Western Hemisphere.”

“If APEP seeks to deliver on its commitments to workers and communities, the Biden-Harris Administration must take leadership alongside our trading partners to remove ISDS from trade deals in the region,” she added. -- Jason Asenso (jasenso at iwpnews.com <mailto:jasenso at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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