Letter to Ambassador Robert Lighthizer, U.S. Trade Representative - GOP to USTR: Maintain Key NAFTA Provision


Date: March 21, 2018
Location: Washington, DC
Issues: Trade

"Dear Ambassador Lighthizer:

We write to reiterate our strong support for the continuation of robust investor protections, including investor-state dispute settlement (ISDS), in NAFTA and to insist that ISDS provisions at least as strong as those contained in the existing NAFTA must be included in a modernized agreement to win Congressional support.

These protections are crucial for U.S. companies that invest abroad to serve foreign markets, whether through exports from the United States or through the provision of local goods or services. These protections provide certainty for U.S. companies in all sectors, including U.S. energy companies that drill or operate pipelines or service stations in Mexico; U.S. railroads that operate on both sides of the U.S.-Mexican border; agriculture entities that maintain feedlots or processing or storage facilities; and U.S. services companies that maintain capital in Mexico to meet regulatory requirements or establish facilities.

The overwhelming majority of Republicans in both the House and the Senate supported Trade Promotion Authority (TPA), which directed the Administration to include robust investor protections in trade agreements. In particular, TPA directs the Administration "to secure for investors important rights comparable to those that would be available under United States legal principles and practices," including by "providing meaningful procedures for resolving investment disputes." Congress expects that both the substantive protections and the enforcement mechanisms for investment commitments will be more or equally robust in an updated NAFTA relative to the existing agreement. Our position on the importance of these protections has not changed and is as strong as ever: ISDS is an essential enforcement mechanism for investor protections and must be maintained rather than weakened or abandoned.

As you may know, the prior Administration disregarded advice from Congressional Republicans and excluded a single sector from ISDS in the Trans-Pacific Partnership (TPP). This policy choice significantly diminished Republican support for that agreement. Excluding ISDS altogether or making it optional in a modernized NAFTA similarly will jeopardize Republican support, even among Members who consistently have voted for trade agreements.

We are open to continuing to discuss ways to enhance the fairness, transparency, and efficiency of NAFTA's ISDS mechanism. But abandoning or weakening this important enforcement tool would harm the ability of U.S. companies to export and locally provide goods and services to Canada and Mexico. In addition, such action would advantage our global competitors -- including China -- which continue to benefit from ISDS and/or direct government ownership and support.

As NAFTA negotiations progress, we look forward to continuing to work with you to achieve the negotiating objectives, including those concerning ISDS, that Congress established through statute, which is necessary to successful consideration of a modernized NAFTA by Congress."