The top Democrat on the House Ways & Means Committee said Thursday (Jan. 7) that TransCanada's plan to file an investor-state claim against the U.S. under the North American Free Trade Agreement (NAFTA) over the rejection of the Keystone XL pipeline highlights why some of the reforms to investment rules that he had proposed should have been included in the Trans-Pacific Partnership (TPP).
[Daily News| January 08, 2016 |Inside U.S. Trade]
Rep. Sander Levin (D-MI) indicated to reporters on Jan. 7 he believes that two reforms he proposed to the Obama administration -- but were eventually not incorporated into TPP -- would have made it more difficult for an investor-state case like TransCanada's to succeed.
The two proposed reforms are the creation of a screening mechanism that allows governments to throw out ISDS cases and a clarification that arbitrary government conduct does not constitute a breach of the minimum standard of treatment.
If NAFTA had the screening mechanism Levin had advocated for in TPP, the U.S. and Canadian governments could have collectively denied TransCanada's arbitration claim, he said.
“I also suggested the two governments be able to essentially prevent the use of ISDS and I wish that had been taken so the U.S. and Canada could essentially dismiss this use of arbitration,” Levin told reporters. “We have a good legal system in this country and those who don't like the U.S. government's decision should go into court.”
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