By Vicki Needham - 12/18/14 01:19 PM EST
Several House and Senate Democrats are urging the Obama administration to leave out provisions in a two major trade deals they say could lead to changes in U.S. finanical regulations.
Five Democrats, led by Rep. Bill Pascrell, Jr. (D-N.J.), a member of the House Ways and Means Committee, wrote President Obama urging him to exclude investor-to-state dispute settlement (ISDS) provisions from the proposed Transatlantic Trade and Investment Partnership (TTIP) agreement.
“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,” the House lawmakers wrote.
“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."
The senators said that investor-state dispute settlement provisions in past trade deals have allowed foreign firms to use the process to challenge government financial policy decisions, and that the provisions in the TPP could be even broader.
The are specifically concerned about market access rules and capital controls.
"Including such provisions in the TPP could expose American taxpayers to billions of dollars in losses and dissuade the government from establishing or enforcing financial rules that impact foreign banks,” the senators wrote.
“The consequence would be to strip our regulators of the tools they need to prevent the next crisis."
The senators argue that Congress must be able maintain the flexibility to impose restrictions on harmful financial products and on the conduct or structure of financial firms.
The letter asks the USTR to respond with its positions on the inclusion of these three provisions in the TPP, and requests that the USTR provide the senators with all U.S. proposals and bracketed negotiating texts relating to the provisions.
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AFL-CIO President Richard Trumka backed the lawmakers’ objections.
“The TTIP can help our economy grow, but only if it excludes the ISDS,” Trumka said.
“ISDS gives foreign investors extraordinary legal rights to challenge generally applicable public policies, including decisions about where to place toxic waste dumps, whether to increase minimum wages, and how to protect children from smoking and water pollution in privatized ‘corporate courts’."