Public interest groups issue strong critique of new US model bilateral investment treaty


May 15, 2012

Click here for a pdf of the full critique.

(Washington, DC, May 10, 2012) Representatives of public interest organizations have released a strong critique of the Obama administration’s new model bilateral investment treaty (BIT). In a joint statement, nine investment experts who served on an official advisory body to the administration on this issue provide a point-by-point analysis of the extent to which the new model incorporates their recommendations.

The contributors include Thea Lee, AFL-CIO Deputy Chief of Staff, who co-chaired the advisory committee, as well as representatives of other unions, environmental groups, the Institute for Policy Studies, and two academics (see below for a full list).

Their overall analysis is that “The new U.S. model BIT does not go far enough to address the concerns that labor unions and environmental, development, and other nongovernmental organizations have raised consistently for many years.”

The administration’s new model BIT, released April 20, is the template the United States will use as a starting point when negotiating a new BIT. Obama officials have recently announced their commitment to accelerate such negotiations with China and India. The model is also a strong indication of what the administration is seeking in the investment chapter of the Trans-Pacific Partnership. A 12th round of those trade talks is taking place in Dallas, Texas May 8-18.

In a detailed table, the joint document shows that the administration completely rejected 15 of their 17 recommendations, which were aimed at achieving the following broad goals:

*making dispute settlement consistent with the public interest
*protecting health, safety, and the environment and promoting good jobs
*ensuring that foreign investors do not have greater rights than U.S. investors
*preventing and mitigating financial crises
*creating a level playing field between state-owned and private enterprises

In the areas of labor and environment, they concluded that the model BIT “made some progress but fell well short of expectations.” They pointed out, for example, that while the model treaty obligates governments to accept certain labor and environmental commitments, it provides no dispute settlement procedures.

Link to full joint statement: (if you have trouble opening the pdf, click here first.)