Eliminating ISDS From NAFTA Could Deplete Support for New Deal, Trade Groups Tell Administration
The heads of the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers in an Aug. 23 letter urged several senior members of the Trump administration to work to preserve investor-state dispute settlement (ISDS) in a renegotiated NAFTA, adding that business support for an updated deal could falter if talks serve to weaken or nix the dispute mechanism. Sent to U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, Secretary of State Rex Tillerson, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, the letter says ISDS doesn’t infringe U.S. sovereignty, and ensures that other countries don’t seize U.S. investors’ property without compensation and don’t impose forced localization requirements compelling jobs to be “shipped overseas.” The letter follows another letter from more than 100 trade groups sent to the administration earlier this month urging continuance of ISDS in NAFTA (see 1708090014).
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“ISDS cannot overturn U.S. laws or regulations: All arbiters can do is award compensation when a government expropriates property or otherwise tramples on the rule of law,” says the letter, which was also sent to Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., as well as House Ways and Means Committee Chairman Kevin Brady, R-Texas, and ranking member Richard Neal, D-Mass. “Moreover, few cases have ever been filed against the United States, and the U.S. government has never lost an ISDS dispute.” USTR didn’t comment. During a June Senate hearing, Lighthizer said he found it “offensive” that “non-elected, non-Americans” could make adjudicatory decisions under NAFTA’s ISDS system, but indicated favor for “rebalancing” ISDS in NAFTA in lieu of scrapping it (see 1706210045).