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Wyden: Looks at the Facts on Investor State Dispute Settlement
As Prepared for Delivery
WASHINGTON - Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) on the Senate floor today delivered the following remarks to respond to critic's concerns regarding Investor State Dispute Settlement (ISDS) provisions in trade agreements.
Over the last several weeks, there have been some misstatements about what this trade package will and will not do. You’ve heard people suggest it’s a backdoor route to immigration reform or action on climate change. You’ve heard people say that a future president could use trade deals to repeal the Affordable Care Act or water down Wall Street reform.
The far-fetched hypotheticals keep coming. At this rate, you’re bound to hear that a future president working on a trade deal might have second thoughts about the Louisiana Purchase.
It is absolutely vital, in my view, to keep this debate grounded in facts. And the fact is, the bipartisan legislation passed by the Finance Committee says in clear terms that trade deals cannot change or override American laws or regulations. But still, there’s a lot of spin out there regarding this legislation and potential future trade agreements.
Many of these hypotheticals are centered on a common part of trade deals called Investor State Dispute Settlement, or ISDS. Over the course of three decades with ISDS in our trade deals, the U.S. has never lost a single dispute settlement case or paid one dime in penalties. In fact, our country has been sued only 17 times. So the notion that ISDS causes a tidal wave of litigation is wrong.
Still, some members are concerned that even the mere threat of lawsuit causes our laws and regulations to get watered down. But again, the U.S. has gone a perfect 17 for 17 in dispute settlement cases. And meanwhile, the U.S. has regulations challenged nearly every day in our own domestic court system. There are thousands of lawsuits filed every year. And our TPA legislation makes it clear that companies don’t have any greater rights under ISDS than they do in U.S. courts.
The fact is, the U.S. is a safe and welcoming environment for investment, but that’s not the case in every other country. Property could be stolen, governments could dream up regulations designed to discriminate against our investors, or American companies in fields like renewable energy could be targeted and punished in unfair ways.
In some places, unlike the United States, there’s not a reliable court to turn to for help. This raises a serious question -- what happens, for example, if a Malaysian judge gets bribed to decide unjustly against an American company, and it costs them millions? In another era, the U.S. had to turn to gunboat diplomacy to protect our economic interests, but in my view, the rule of law is a better option than military force.
It’s also important to recognize that there’s an increasing number of cases being brought by pro-environment plaintiffs. That looks to me like a positive trend -- whether it’s the renewable energy company challenging an E.U. state that rolled back incentives for solar or wind energy, or the ecotourism investor suing Barbados for the discharge of sewage in a wetlands area.
Skeptics want to make the case that arbitrators are biased in favor or corporations, or that the panels who decide cases are rife with conflicts. The numbers tell a different story, which is that the overwhelming majority of cases are decided in favor of governments.
The record simply does not support the proposition that arbitrators are unprincipled individuals that allow corporations to use dispute settlement to have laws and regulations tossed out.
Finally, I want to be very clear that I will only accept a plan for dispute settlement that uses a transparent process. What’s true in trade negotiations overall is true with dispute settlement, too -- Americans cannot be kept in the dark. So hearings, briefs, and decisions must be open to the public.
My bottom line is this. The bipartisan trade legislation that’s now before the Senate will go further than ever before to protect American sovereignty and affirm the fact that only democratically elected leaders write the laws in this country. And done right, our trade policies will help guarantee that American companies – who have grown up here, invested here, and found opportunities to sell Brand Oregon and Brand America around the world – get the same fair treatment abroad that they get here at home.
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