Doggett, DeLauro, Whitehouse and Coalition Urge for Removal of Trade Provisions Abused by Corporations Against Sovereign Nations

Contact: Alexis.Torres@mail.house.gov

Washington, D.C.—Today, Representatives Lloyd Doggett (D-TX-37), Rosa DeLauro (D-CT-03), and Senator Sheldon Whitehouse (D-RI) led 34 of their colleagues in urging Trade Ambassador Katherine Tai to proceed with reported plans to address ongoing harms attributable to investor-state dispute settlement (ISDS) mechanisms in U.S. free trade agreements. Specifically, the members call for the elimination, or drastic reduction, of the ability of powerful multinational corporations to use ISDS tribunals to extract unlimited sums from sovereign countries over laws, actions, or court rulings that allegedly conflict with corporate investments.

The ISDS mechanism is a private, undemocratic extrajudicial arbitration system that allows corporations to sue foreign governments serving as U.S. trading partners, often resulting in high costs to a country’s taxpayers and weakened human rights and policy regulations.

In the bicameral letter, the lawmakers write, “We commend your efforts to address ongoing ISDS liabilities in existing U.S. trade and investment agreements. We appreciate that throughout your tenure you have upheld the Biden administration’s commitment to exclude ISDS from all U.S. trade negotiations. Taking further action now would build on the Trump administration’s elimination of the North American Free Trade Agreement’s (NAFTA) ISDS regime between the United States and Canada and significant scale-back of NAFTA ISDS with respect to Mexico.”

Through a pressure campaign to obstruct progress on removing the ISDS mechanism from new and existing trade agreements, the U.S. Chamber of Commerce recently released two Freedom of Information Act requests to assert a disconnect between Congress and the executive branch. Yet, ISDS reform has generally experienced bipartisan support, with reform efforts spanning several administrations.

“However it is implemented, we support extending to other countries the approach taken by the U.S. government with Canada in the context of the 2020 U.S.-Mexico-Canada Agreement (USMCA), which was to eliminate ISDS tribunals’ authority to override the views of signatory countries,” wrote the lawmakers. “We have witnessed ISDS tribunals ignore countries’ Interpretive Notes, such as that issued by the NAFTA Commission in 2004, and thus request robust safeguards to prevent ISDS tribunals from disregarding any immediate-term efforts the United States may be considering with willing trade partners to ensure that ISDS tribunals enforce views jointly endorsed by countries through an exchange of formal letters so as to reduce the damage of ongoing ISDS cases.”

Since May 2023, Congressional lawmakers have requested intervention on the ISDS mechanism in existing U.S. trade deals including, on behalf of the people of Honduras in a case brought forth by U.S. company Honduras Próspera seeking almost $11 billion, or nearly two-thirds of the country’s national budget; the use of all tools like the Americas Partnership for Economic Prosperity (APEP) framework to coordinate with regional foreign partners; and, the removal of such provisions from the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).

Additional signers of today’s letter include Representatives Judy Chu (CA-28), Danny K. Davis (IL-07), Eleanor Holmes Norton (D-DC), John Garamendi (CA-08), Brad Sherman (CA-32), Pramila Jayapal (WA-07), Rashida Tlaib (MI-12), Ro Khanna (CA-17), Cori Bush (MO-01), Greg Casar (TX-35), Chris Deluzio (PA-17), Debbie Dingell (MI-06), Sylvia Garcia (TX-29), Jesús “Chuy” García (IL-04), Raúl Grijalva (AZ-07), Johnathan L. Jackson (IL-01), Hank Johnson (GA-04), Marcy Kaptur (OH-06), Dan Kildee (MI-08), Summer Lee (PA-12), Barbara Lee (CA-12), Betty McCollum (MN-04), Jerry Nadler (NY-12), Donald Norcross (NJ-01), Mark Pocan (WI-02), Delia Ramirez (IL-03), Jan Schakowsky (IL-09), Jill Tokuda (HI-02), Paul Tonko (NY-20), Nydia Velázquez (NY-07), Alexandia Ocasio-Cortez (NY-14), Veronica Escobar (TX-16and Senators Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt). 

The full letter can be found here.