Democrats urge officials to leave out investor-state dispute provisions in major trade deals

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.

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In a separate letter, Sens. Elizabeth WarrenElizabeth WarrenPavlich: Lectures and lies on guns The Trail 2016: 11 hours, 800 pages, 0 changed minds Overnight Regulation: Warren demands stronger worker protections MORE (D-Mass.), Tammy BaldwinTammy BaldwinOvernight Finance: Wall Street awaits Brexit result | Clinton touts biz support | New threat to Puerto Rico bill? | Dodd, Frank hit back Dem hopeful that Congress will eliminate tax break for investment fund managers Congress should stop government hacking and protect the Fourth Amendment MORE (D-Wis.), and Edward MarkeyEd MarkeyOvernight Tech: Groups grade Clinton tech agenda | Facebook activates safety check in Istanbul | Another holdup for location data bill Overnight Cybersecurity: US sees drop in Chinese cyberattacks Senator pushes for cyber protections in vehicles MORE (D-Mass.) raised concerns about those provisions being added to the Trans-Pacific Partnership (TPP), which they argue would make it harder for Congress and regulatory agencies to prevent future financial crises.

“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.

Reps. Lloyd Doggett (Texas), Linda Sanchez (Calif.), John Lewis (Ga.) and Jim McDermottJim McDermott'Will on the Hill' pokes fun at 2016 election Overnight Healthcare: House mental health bill finally moving forward Lawmakers urge Obama not to send shoulder-fired missiles to Syria MORE (Wash.), also Ways and Means Committee members, signed onto the letter that also went to Secretary of State John KerryJohn KerryBudowsky: Save Europe, revote Brexit White House: We were prepared for Brexit vote After Brexit vote, is anything left of Britain? MORE and U.S. Trade Representative Michael FromanMichael FromanRyan calls on US to forge trade deal with UK UK vote triggers talks with US Furman says Pacific trade deal will pass this year MORE.  

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’."