Much of our work on infrastructure policy and regulation deals with safeguards for investment. Uncertainty around investments is reduced when international arbitration is permitted. With many governments from the developed-market economies, the US government has been a strong supporter of international arbitration. But when it looks like these safeguards apply to their own country, they are unhappy.
“This is really troubling,” said Senator Charles E. Schumer of New York, the Senate’s No. 3 Democrat. “It seems to indicate that savvy, deep-pocketed foreign conglomerates could challenge a broad range of laws we pass at every level of government, such as made-in-America laws or anti-tobacco laws. I think people on both sides of the aisle will have trouble with this.”
The United States Trade Representative’s Office dismissed such concerns as overblown. Administration officials said opponents were using hypothetical cases to stoke irrational fear when an actual record exists that should soothe worries.
Such “Investor-State Dispute Settlement” accords exist already in more than 3,000 trade agreements across the globe. The United States is party to 51, including the North American Free Trade Agreement. Administration officials say they level the playing field for American companies doing business abroad, protect property from government seizure and ensure access to international justice.