Open Letter to U.S. President Biden: End ISDS in the Americas

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En collaboration avec plusieurs organisations de la société civile nord-américaines et sud-américaines, le RQMI a signé une lettre adressée au président américain Joe Biden, soutenant sa position déclarée contre le règlement des différends entre investisseurs et États (RDIÉ) et l’exhortant à éliminer le RDIÉ des accords de libre-échange et des traités d’investissement bilatéraux en vigueur dans les Amériques.

Le lettre est uniquement disponible en anglais.

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Dear President Biden:

We represent a broad range of civil society, labor, environment, development and community-based organizations throughout the hemisphere. For decades, we have raised alarm about many elements of corporate-dominated free trade agreements, including the Investor-State Dispute Settlement (ISDS) system that has been negotiated into trade and investment agreements and that grants multinational corporations privileged legal rights to sue governments.

Under ISDS, foreign-owned companies can launch challenges against governments if they assert that a change in law or regulation violates the special rights granted by a trade or investment agreement, even if the new policy or government action is in the public interest. The tribunals can order governments to pay unlimited compensation based on the future profits that a corporation claims it would have made without that government action. As a result, governments throughout Latin America have paid billions of dollars in compensation to foreign companies at taxpayers’ expense, simply for putting in place sound public policy to protect health, the environment, and communities. Latin American governments have been ordered by ISDS tribunals or accepted through settlements to pay close to $28 billion in taxpayer money  to corporations, and more than 36 billion dollars are pending in ongoing ISDS claims against Latin America.

Even the United States is now facing a $15 billion ISDS claim after canceling the construction of the Keystone XL oil pipeline given it posed environmental and health threats, as raised by Indigenous and climate activists. And, scandalously, a U.S. company is threatening the newly elected government of Honduras with a $10.7 billion ISDS claim – equal to two-thirds of the country’s entire 2022-2023 budget, after the government’s democratic process led to the repeal of a controversial law that had previously created free trade zone cities.

We strongly support your stated position that the United States should no longer pursue these extreme investor rights in future trade agreements. There is now consensus across the political spectrum in the United States and around the world that ISDS is not needed to promote positive investment and continues to cause great harm to human rights and efforts to tackle climate change.

We now urge you to take the next step and eliminate ISDS in already existing agreements in our hemisphere. You have indicated a desire to negotiate an Americas Partnership for Economic Prosperity (APEP), potentially building from U.S. free trade agreements in the region. Indeed, out of the 11 recently announced participating countries, eight have agreements with the United States including ISDS provisions. Our organizations have concerns about many aspects of those trade deals negotiated behind closed doors with undue corporate influence. To demonstrate that the United States is indeed committed to repairing the damage from past trade deals, the U.S. should begin by working to remove ISDS from existing accords.

The U.S.-Mexico-Canada Agreement (USMCA) significantly reduced ISDS, while leaving an unacceptable loophole for U.S. fossil fuel companies in Mexico. The time has come to eliminate ISDS altogether from existing free trade agreements and bilateral investment treaties in force between the United States and countries in the Americas, such as the DR-Central America Free Trade Agreement, the U.S.-Colombia FTA, U.S.-Peru FTA, U.S.-Chile FTA, U.S.-Panama FTA, the USMCA, and bilateral investment treaties with Argentina, Ecuador, Honduras, Jamaica, Panama, Trinidad and Tobago, and Uruguay.

Eliminating ISDS from these agreements would be an important down payment toward a comprehensive rethink of the current unjust “free trade” model that has privileged corporate profits over people and the planet in order to create a new pathway of friendship and mutual support among our countries.

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