<html><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; "><a href="http://insidetrade.com/201204252396973/WTO-Daily-News/Daily-News/labor-environmental-provisions-in-model-bit-spark-divergent-reactions/menu-id-948.html" style="color: blue; text-decoration: underline; ">http://insidetrade.com/201204252396973/WTO-Daily-News/Daily-News/labor-environmental-provisions-in-model-bit-spark-divergent-reactions/menu-id-948.html</a><o:p></o:p></div><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; "><o:p> </o:p></div><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 19.2pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; "><b><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: rgb(204, 0, 0); ">Daily News<o:p></o:p></span></b></div><p class="MsoNormal" style="margin-top: 3pt; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 16.5pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; position: static; z-index: auto; "><b><span lang="EN-GB" style="font-size: 15pt; font-family: Arial, sans-serif; color: black; ">Labor, Environmental Provisions In Model BIT Spark Divergent Reactions<o:p></o:p></span></b></p><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 19.2pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">Posted: April 25, 2012<o:p></o:p></span></div><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 19.2pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; "><o:p> </o:p></span></div><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">Strengthened labor and environmental protections in the revised model bilateral investment treaty (BIT) that the Obama administration <a href="http://insidetrade.com/201204202396561/WTO-Documents/Text-Document/administration-unveils-new-model-bit-following-three-year-review/menu-id-174.html" style="color: blue; text-decoration: underline; "><span style="color: black; ">unveiled on April 20</span></a> have sparked divergent reactions among U.S. stakeholders. Business groups are worried that the provisions could make it more difficult to negotiate BITs with countries like India and China, whereas labor unions are blasting the provisions for not going far enough to ensure robust protections.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">According to AFL-CIO Deputy Chief of Staff Thea Lee, the new labor and environmental protections represent an improvement, but are still inadequate because they are not subject to BIT dispute settlement procedures. The AFL-CIO is "deeply disappointed" by this, because it means that these protections are "little more than paper commitments, without any recourse in the event that consultation fails to resolve a problem," Lee said in a statement.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">On balance, the new model BIT "remains lopsided in terms of granting overly broad rights and protections to multinational corporations ... without requiring even the most basic minimum standards of responsible behavior with respect to labor and the environment," Lee concluded in her statement. The 2004 model BIT, which the administration has now updated, also did not subject labor or environmental protections to dispute settlement processes.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">By contrast, U.S. business groups, as well as House Ways and Means Committee Chairman Dave Camp (R-MI), are worried that, even though the new labor and environmental protections are not subject to dispute settlement, they could nonetheless make it harder for the U.S. to conclude BITs with countries like China and India, where the idea of placing labor or environmental protections in trade and investment deals is still a sensitive issue.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">In an April 23 release, Camp said he was "very concerned" that these new provisions "could undermine the United States' investment engagement through BITs." The U.S. Chamber of Commerce and the Emergency Committee for American Trade (ECAT) also cited their worries with these new provisions in separate releases.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">"The 2012 Model BIT's labor and environmental provisions go well beyond the scope of prior U.S. BITs and the BITs of our major competitors," ECAT wrote in its April 20 press release. "ECAT is concerned that these labor and environment provisions set a bad precedent and may well undermine the United States' ability to conclude BITs with developing countries."<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">The new model BIT bolsters labor and environmental protections by obligating BIT parties to ensure that they do not waive or otherwise derogate from their own labor laws. The new model also commits the parties to effectively enforce their own labor laws. This approach differs from the 2004 model, which had no obligation on effective enforcement and only stated that parties must "strive to ensure" that they do not derogate from their own labor laws (<a href="http://insidetrade.com/201204202396589/WTO-Daily-News/Daily-News/us-unveils-revised-model-bit-alters-provisions-on-labor-environment-soes/menu-id-948.html" style="color: blue; text-decoration: underline; "><span style="color: black; ">see related story</span></a>).<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">One business source argued that the new BIT provides for binding commitments that a country like China would have to adhere to, even if those binding commitments are not subject to formal dispute settlement. Therefore, China or any other developing country may balk at the idea of signing up to a BIT with that language, as the U.S. could then apply diplomatic pressure if the other country fails to live up to the tougher BIT standard, this source said.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">This source also noted that the issue of labor rights in trade agreements is so sensitive that India has steadfastly refused to discuss this topic in the World Trade Organization, even in non-binding terms. This therefore creates at least a question on whether this could complicate the relaunch of BIT talks with India, this source argued.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 15pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">There are other reasons for worry as well, according to business sources. For instance, the inclusion of stronger provisions in the new model BIT could create a "slippery slope" where the next model BIT review includes the stronger provisions and full enforceability under dispute settlement provisions. In addition, countries like China or India may demand a concession from the U.S. on investment in exchange for agreeing to the new provisions, one source said.<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 1.5pt; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 11.25pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><span lang="EN-GB" style="font-size: 9pt; font-family: Arial, sans-serif; color: black; ">At the same time, another business source stressed that these new provisions are only a problem for business groups to the extent that they actually hinder the ability of the U.S. to conclude new BITs with foreign countries. They also noted that the administration has included several new, useful provisions in its updated model BIT, including ones relating to the forced transfer of technology and the role of state-owned enterprises.<o:p></o:p></span></p><div style="margin-top: 0in; margin-right: 0in; margin-left: 0in; margin-bottom: 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; "><span lang="EN-GB"><o:p> </o:p></span></div></body></html>