U.S. Investment Policy Doesn’t Need another Public Review
In a February 28 letter to U.S. Trade Representative Michael Froman, a set of interest groups invited him to join his EU counterparts and “embark upon a thorough, open, public consultation process to review the costs and benefits of the investor protection policies in trade and investment agreements, particularly the Trans-Atlantic Trade and Investment Partnership (known as the ‘TTIP’).” Since 2009, when the Lisbon Treaty entered into force, the European Union has been working to manage the transition of negotiating authority for investment agreements from the member states to the European Commission, while also working through new governance practices related to trade negotiations that Lisbon requires. Under the circumstances, it makes sense for the Europeans to work through these new practices in advance of the TTIP negotiations. Fortunately for the United States, the reality with respect to investment policy is “been there, done that.”
In February 2009, the Obama administration tasked the Department of State and the Office of the U.S. Trade Representative (USTR) to conduct a review of the Model Bilateral Investment Treaty (BIT) text to ensure that it was consistent with the public interest and the administration’s overall economic agenda. Since 2004, the Model BIT and free trade agreement (FTA) investment chapter texts on investor-state dispute settlement (ISDS) have always been identical. The administration completed its review of the Model BIT text in April 2012 after an intensive, three-year interagency debate that was informed by extensive input from Congress, companies, business associations, labor groups, environmental and other nongovernmental organizations (NGOs), and academics.
Public contributions were provided to the BIT review through two processes. In July 2009, the State Department and USTR published a Federal Register notice inviting citizens to comment on the Model BIT text and inviting the public to a meeting that was held on July 29, 2009. More than 70 individuals attended the meeting, of whom 17, including former House International Relations Committee chairman Ben Gilman and House Ways and Means Committee member Kevin Brady, made statements. Meanwhile, the State Department and USTR received 36 written submissions through the Federal Register process. Both statements and written comments addressed investor-state dispute settlement directly, and their quantity and quality speak to the seriousness of the process.
In addition, the State Department and USTR invited the Advisory Committee on International Economic Policy (ACIEP) to establish a subcommittee to review the BIT text with special emphasis on dispute settlement provisions, among others. The subcommittee, consisting of representatives from business, academia, labor, environmental NGOs, and the legal profession, met through the summer of 2009. On September 30, 2009, ACIEP presented the subcommittee’s report to the State Department and USTR. Section 16 of the report opens with the statement that “the subcommittee conducted extensive discussions on dispute settlement, especially investor-state dispute settlement. Though the deliberations did not converge upon a recommendation, they provided valuable insight into the issues involved.”
We both were involved in this process. One of us was a cleared adviser and member of the ACIEP subcommittee; the other was deputy director of the State Department’s Office of Investment Affairs. In the end, after the three-year review, the Obama administration announced a Model U.S. BIT text that included ISDS, determining that it is “consistent with the public interest and the administration’s overall economic agenda.” In sum, the 2012 Model BIT text was the subject of extensive public consultation and reflects the policy of this administration. Groups desiring another bite at this apple should first reflect on the substance of the 2009–2012 process and specifically identify any issues missed by the Model BIT review.
Scott Miller holds the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Greg Hicks is a State Department fellow at CSIS. The views expressed herein are those of the authors and do not necessarily reflect the views of the U.S. Department of State or the U.S. government.
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