Dozens of Democrat members of the House and Senate are asking the Biden administration to remove investor-state dispute settlement provisions from existing and future trade and investment agreements.

In a May 2 letter to U.S. Trade Representative Katherine Tai and Secretary of State Antony Blinken, the lawmakers said that under ISDS disputes are handled not through the judicial system but by “industry-friendly” tribunals that have no set procedures, precedents, or standards of evidence and allow “mistruths or exaggerations [to] go unpunished.” These provisions “tilt the playing field even further in favor of large corporations,” the letter said, “incentivizing offshoring and undermining the sovereignty of the United States and other governments.”

According to the letter, President Biden committed during his presidential campaign not to include ISDS in any future trade agreements, and USTR Tai said early in her tenure that she would “pursue a trade agenda in line with that commitment.” However, the lawmakers believe ISDS should be removed from existing agreements as well because “large multinational corporations” are weaponizing ISDS “to benefit their own interests at the expense of workers, consumers, and small businesses globally.” For example, they said, governments in Latin America “have been ordered by ISDS tribunals to pay close to $28 billion to corporations, with far more in pending ISDS claims … simply for putting in place sound public policy to protect the environment and the health and economic well-being of their communities.”

The lawmakers therefore called on the Biden administration to “investigate and pursue an effective path to removing consent to ISDS arbitration by the U.S. and our treaty partners in existing bilateral investment treaties and free trade agreements.” Noting that ISDS liability was largely removed in the U.S.-Mexico-Canada Agreement, they also urged the White House to ensure that the Americas Partnership for Economic Prosperity it is negotiating with 11 countries in the Western Hemisphere does not include ISDS provisions and to address such provisions if and when it updates FTAs already in place with eight of those countries.

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