Ways & Means Members say "No" to ISDS Provisions in Trade Treaties

December 18, 2014


In a significant move, five House members from the Ways & Means Committee notified President Obama that global tribunal provisions should be excluded from future trade treaties.

Most, if not all, of these congressmen have voted for past agreements that did included the Investor State Dispute Settlement (global tribunal) mechanism.  ISDS basically means that foreign corporations can sue our local, state or federal governments before global tribunals rather than in the US courts. 

Even pro-trade agreement organizations have been expressing discomfort over ISDS provisions.  The Germans have also said that they don't want them.

Here is the letter.

December 17, 2014
The Honorable Barack Obama
President of the United States of America
The White House
Washington, DC 20500
Dear Mr. President:
We thank you for your efforts to grow the economy, provide greater opportunities for working people and promote more sustainable energy and environmental policies. As you begin negotiations on the Trans-Atlantic Trade and Investment Partnership (TTIP), we urge you to seek investment rules that further these goals by ensuring an appropriate balance between investor protections and the public interest.
Congress has repeatedly expressed concerns about the investment provisions of U.S. trade agreements. The inclusion of investor-to-state dispute settlement process (ISDS) in previous trade agreements advantages foreign investors over domestic ones and threatens US laws, regulations, and judicial decisions protecting health and public safety.  These provisions provide foreign investors the right to either bypass our own courts entirely or to undermine them by challenging their results before panels of private arbitrators who are not required to protect the public interest or to utilize American legal principles and precedent.
We share your goals of ensuring that U.S. interests that invest abroad are not treated in a discriminatory fashion or denied fair opportunity to seek and achieve redress of grievances and believe they can be attained in TTIP without the inclusion of ISDS provisions. Quite simply, there is no need for ISDS in a free trade agreement between developed countries with well-established court systems, like the United States and the countries of the European Union. France, Germany, and the United Kingdom, are but a few of European Union countries party to TTIP in which the rule of law is not in doubt. According to the Chamber of Commerce, U.S. firms already have $2.3 trillion directly invested in EU countries, suggesting that U.S. businesses already believe investments in EU countries are safe. Additionally, the absence of such mechanisms in the U.S.-Australia Free Trade Agreement, the earlier U.S.-Canada Free Trade Agreement, and the U.S.- Israel Free Trade Agreement provide relevant precedent that counsels against including investor-state dispute settlement provisions in the TTIP.
Excluding ISDS provisions from the TTIP is more likely to generate broad public support in both the United States and Europe.  Should investor-to-state provisions be included in the TTIP, we believe that reforms to the current model are critical to avoiding the problems that have arisen under the provisions in existing FTAs and BITs. We would be pleased to work with you and your staff to investigate foreign investor rights reform ideas further. As always, we thank you for considering our views on this important issue.
___________________________    ___________________________
Bill Pascrell, Jr.                                 Lloyd Doggett
Member of Congress                         Member of Congress
___________________________    ___________________________
Linda T. Sanchez                              John Lewis
Member of Congress                         Member of Congress
Jim McDermott
Member of Congress
Cc:       The Honorable John Kerry, Secretary of State
Ambassador Michael B. Froman, United States Trade Representative

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