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 PascrellWilliam (Bill) James PascrellHere are the 95 Democrats who voted to support impeachment How Trump suddenly brought Democrats together on a resolution condemning him 82-year-old House Democrat asks 'The Squad' if he can join MORE, 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 Ann WarrenHarris faces pressure to define policy proposals Harris voices support for Puerto Rico protesters: 'I stand with them' Democrats slam Puerto Rico governor over 'shameful' comments, back protesters MORE (D-Mass.), Tammy BaldwinTammy Suzanne BaldwinOvernight Health Care — Presented by PCMA — Judge upholds Trump expansion of non-ObamaCare plans | Williamson says she believes in vaccines | House committee to hold oversight hearing on Juul The Hill's Morning Report: Trump walks back from 'send her back' chants Overnight Health Care — Presented by PCMA — Health care moves to center stage of Democratic primary fight | Sanders, Biden trade sharps jabs on Medicare for All | Senate to vote on 9/11 bill next week | Buttigieg pushes for cheaper insulin MORE (D-Wis.), and Edward MarkeyEdward (Ed) John MarkeyHillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Poll: McConnell is most unpopular senator FTC looks to update children's internet privacy rules 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.

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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’."