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Democrats Introduce Legislation to Ban Investor-State Provisions in Trade Agreements

Feb 19, 2015
Press Release

Washington, D.C. U.S. Rep. Mark Pocan (D-WI) and 12 House Democrats today introduced H.R. 967: Protecting America’s Sovereignty Act, legislation to prohibit investor-state dispute settlement (ISDS) provisions in foreign trade agreements. The Protecting America’s Sovereignty Act was introduced with the following original House co-sponsors: Reps. John Conyers (D-MI), Marcy Kaptur (D-OH), Peter DeFazio (D-OR), Louise Slaughter (D-NY), Rosa DeLauro (D-CT), Gene Green (D-TX), Jan Schakowsky (D-IL), Jim McGovern (D-MA), Raul Grijalva (D-AZ), Keith Ellison (D-MN), Rick Nolan (D-MN), and Paul Tonko (D-NY).

Full bill text is available here

This legislation will prevent the inclusion of investor-state dispute settlement (ISDS) provisions in any trade agreement between the U.S. and a foreign country. ISDS rules give foreign corporations a special right to sue a government when a law they deem could affect their business, such as protecting the environment or public health, hurts a firm’s current or expected profits. Under ISDS rules, corporations may seek compensation from a secretive tribunal of corporate international trade lawyers which put investor protections and corporate profits ahead of consumer rights and job protections and outside the U.S. court system.

“ISDS provisions could weaken U.S. health, safety, and environmental protections if they continue to be part of future trade agreements, including the Trans-Pacific Partnership,” said Rep. Pocan. “We cannot allow multinational corporations to continue prioritizing their profits over the health, well-being, and sovereignty of our communities. It’s time we give up the failed trade policies of the past and adopt a new 21st century trade framework which will grow American jobs and protect U.S. consumers.”

“Americans have seen what happens when corporations use ISDS provisions in other foreign trade agreements,” Rep. Pocan continued. “For the past half century, corporations have used ISDS provisions in international trade agreements to boost profits at the expense of local communities. Instead of including protections for multinational corporations, our trade agreements must provide consumer and job protections for Americans. If we do not learn from history, we are doomed to make the same mistakes.”

One of the most egregious examples of investor-state dispute resolution occurred after Australia implemented a plain packaging law for cigarette cartons, designed to reduce the rate of smoking and improve the health of its citizens. Philip Morris Asia Limited – the Asian arm of the giant U.S. tobacco producer - challenged the law before the international Permanent Court of Arbitration, citing an ISDS provision in a 1993 investment treaty with Hong Kong. The corporation claimed the law violated this agreement, depriving Philip Morris of the full value of its investments and impairing their profitability. Philip Morris is seeking billions of dollars from the Australian government for compensation.

In 2014, Rep. Pocan launched the #TruthInTrade campaign which highlighted a number of cases where ISDS provisions in foreign trade agreements have weakened food, environmental, and health safety regulations.