Rethink Trade | 25 October 2023
Press Release: To strengthen ties with countries in the Americas and deliver on climate, health, and democracy APEP goals, Pres. Biden should launch all-Americas exit of the Investor-State Dispute Settlement (ISDS) regime
October 25, 2023
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CONTACT: Jimmy Wyderko email@example.com
For Immediate Release: Oct. 25, 2023
To Strengthen Ties with Countries in the Americas and Deliver on Climate, Health, and Democracy APEP Goals, Pres. Biden Should Launch All-Americas Exit of the Investor-State Dispute Settlement (ISDS) Regime at Nov. 3 Summit in D.C.
Sen. Elizabeth Warren and Nobel Prize Laureate Joseph Stiglitz Join Rethink Trade and Georgetown and Columbia Law School Authors Releasing Comprehensive Guide to ISDS Exit
WASHINGTON, D.C. – The Biden administration can greatly enhance U.S. relationships with countries in the Americas and promote the climate, health, and equity goals of its Americas Partnership for Economic Prosperity (APEP) by leading an Americas-wide exit of the Investor-State Dispute Settlement (ISDS) regime that to date has generated $47 billion in pending corporate demands for taxpayer compensation in claims against the 12 APEP nations’ climate, health, and other public-interest policies.
Rethink Trade, Columbia Law School’s Columbia Center on Sustainable Investment and Georgetown University Law’s Center for the Advancement of the Rule of Law in the Americas and Center on Inclusive Trade and Development released a comprehensive white paper, “Turning the Tide: How to Harness the Americas Partnership for Economic Prosperity to Deliver an ISDS-Free Americas.” It outlines the mechanisms in international law to extract countries in the Americas from the ISDS regime and the U.S. domestic legal options to do so.
There are currently 43 ISDS-enforced agreements among the 12 APEP countries. Corporations have launched 231 ISDS attacks, of which 73 are pending cases totaling $47 billion in corporate claims using these pacts. This includes a demand for $15 billion in U.S. government compensation by the Canadian firm that tried to build the Keystone XL pipeline. Corporations have won or forced settlements in 42% of the cases involving APEP nations that have reached an outcome. President Biden invited leaders from countries in the Western Hemisphere to Washington on November 3 for an APEP summit.
“The Biden administration has said ISDS will not be part of any of the U.S. future trade or investment deals. That is great, but future agreements are only part of the battle,” said Sen. Elizabeth Warren (D-Mass.). “The United States is still locked into many preexisting agreements that allow corporations to weaponize ISDS when we do something that they don’t like. I’m going to keep on fighting until every last one of our trade agreements is ISDS-free.”
“What makes these issues especially relevant now is that President Biden has launched this Americas Partnership for Economic Prosperity, and one of the main themes is fighting climate disaster and economic inequality, improving public health, strengthening democracy. To achieve any of these goals, ISDS has to go. It is a direct hindrance,” said Joseph Stiglitz, Professor of Economics at Columbia University. “Launching this as a group exit would be very helpful in protecting our neighbors from one of the factors that leads some countries not to exit. That is the fear, not grounded actually with much evidence but still it’s a fear, that investors will see an individual country leaving the system as a signal of some sort that they’re not committed to good investment. When a bloc of countries exit together, there’s safety in numbers.”
“The Americas is arguably the region hardest hit by ISDS. APEP countries have faced a disproportionate number of ISDS claims, most of them challenging environmental regulations, public health measures, and progressive tax policies. With more and more countries realizing the perils of ISDS and increasingly adopting strategies to limit their liability, it is essential that the Americas are not left behind,” said Daniel Rangel, Research Director at Rethink Trade who coordinated the White Paper writing project.
“In light of the general rule in public international law that contracting countries are the ‘masters of their treaties,’ there is no reason for governments to shy away from terminating their international investment agreements or amending trade agreements with ISDS clauses. This would pave the way for the implementation of more effective and efficient investment policies that will not only maximize the quantity of sustainable investments, but also align them with the countries’ overarching national (and global) development goals,” said Ladan Mehranvar, Senior Legal Researcher at the Columbia Center on Sustainable Investment.
“The ISDS regime is undemocratic: it was created for and by powerful, well-organized corporations, and has served their interests almost exclusively. It also poses a real threat to the world’s climate action efforts, having already been used against them. Many countries are already pulling out from ISDS. It’s time for the Americas to follow suit,” said Mario Osorio, Senior Fellow at the Center on Inclusive Trade and Development, Georgetown University Law Center.
“APEP’s admirable goals of inclusive and sustainable growth and shared prosperity conflict with the operation of ISDS. The United States has already set a new direction in USMCA, eliminating ISDS with Canada and drastically reducing it with Mexico. It is time for regional action that, leaving ISDS behind, enables governments to address climate change and prioritize sustainable and responsible investment. The Americas can lead the way,” said Alvaro Santos, Faculty Director of the Center for the Advancement of the Rule of Law in the Americas, Georgetown University Law Center.
“The U.S. government pushed a lot of its neighbors into these damaging agreements. It would show real respect and partnership for the Biden administration to lead an Americas-wide exit to help its allies replace the old hyperglobalization corporate agenda for alternatives that focus on helping people and countering climate catastrophe as President Biden is doing at home,” said Lori Wallach, Director of the Rethink Trade program at the American Economic Liberties Project.