In early March, the AFL-CIO joined 42 other organizations representing labor, business, public health, environmental concerns, consumers, family farms and good governance as well as three legal scholars in sending a letter calling on the Office of the United States Trade Representative (USTR) to match the European Commission’s commitment to holding a public consultation on investment issues, particularly with respect to the pending U.S.-European Union trade negotiations (known as the Trans-Atlantic Trade and Investment Partnership, or TTIP).
While the AFL-CIO has received no formal response, the USTR did post a blog explaining that it already has held extensive consultations regarding the TTIP, and with respect to investment issues in particular.
Unfortunately, the blog post failed to address the issues raised in the letter. It pointed in particular to the review process for the U.S. Model BIT. A “BIT” is a type of treaty that covers solely investment issues (rather than the full panoply of trade and economic governance issues) and the “Model BIT” serves as a guide to what the United States would like to see in every BIT and the investment chapters of pending trade agreements. The Model BIT consultation process—which consisted of a federal register notice that garnered 36 comments, a single public meeting and a report from an advisory committee—was held in 2009, several years before the TTIP negotiations were even announced. The Model BIT consultation process, like current trade negotiations, involved many stakeholders representing a wide array of views, but the final Model BIT reflected almost exclusively business input. A consultation process that concluded more than four years ago is hardly sufficient to address bilateral U.S.-European investment that already stands at $4.1 trillion, according to the U.S. Chamber of Commerce.
The blog then describes its ongoing stakeholder input and consultation process for the TTIP. These consultations, while ongoing, are an inadequate substitute for an open, democratic and participatory process—the type of process used for other economic policy making in the United States (e.g., tax legislation, health legislation and financial services regulation).
Finally, the post fails to address the concrete concerns raised in the AFL-CIO letter about investment policy and the investor-state dispute-settlement process in particular:
- What rationale justifies the disparate treatment of domestic and foreign investors that Investor to State Dispute Settlement (ISDS) provides?
- What rationale justifies the use of undemocratic, unaccountable panels of private lawyers to make decisions regarding whether the United States has breached an obligation to a foreign investor?
- Why are these panels not required to defer to U.S. law when they are making decisions about issues squarely covered by the Takings Clause of the Fifth Amendment to the U.S. Constitution?
- Why do foreign investors receive special legal rights in trade agreements without taking on any obligations whatsoever?
- What justifies the $8 million in average costs that taxpayers incur to defend such cases?
These are just a few of the numerous questions about investment policies that citizens and advocacy groups raised during the TTIP public comment period—but which the USTR so far has failed to answer.
The AFL-CIO renews its call for a public consultation process on investment issues raised by the TTIP. The EU already has begun its process. When will the USTR follow suit?
Celeste Drake is a Trade & Globalization Policy Specialist at the AFL-CIO. This post first appeared on the AFL-CIO Now blog.