By David Lawder
WASHINGTON (Reuters) - A group of 37 Democratic lawmakers on Thursday urged the U.S. Trade Representative's office to press ahead with efforts to weaken investment protections in U.S. trade agreements after the U.S. Chamber of Commerce alleged that the Biden administration was pursuing "secret" talks on the matter.
The lawmakers, led by Representatives Lloyd Doggett and Rosa DeLauro and Senator Sheldon Whitehouse, have long urged that investor-state dispute settlement (ISDS) provisions be eliminated from U.S. trade deals.
ISDS mechanisms allow companies investing in trade partner countries to bypass local courts to settle government disputes through external tribunals.
"We strongly encourage you to act urgently to eliminate or drastically reduce the ability of multinational corporations to use ISDS tribunals as a tool to attack legitimate government actions and extract unlimited sums from countries' taxpayers," they wrote in the letter, seen by Reuters, to U.S. Trade Representative Katherine Tai.
The U.S. Chamber of Commerce last week said it sent Freedom of Information Act requests to USTR over what it called "secret" conversations aimed at renegotiating the investment chapters in U.S. free trade agreements with Colombia and with Mexico and Canada. The requests seek more information on the matter, which the Chamber says would lead to "substantive changes to investment protections."
The top U.S. business lobbying group said weakening the provisions would be "a gift to our trading partners" and would weaken U.S. efforts to encourage investments to shift supply chains from China to the Western Hemisphere.
A USTR spokesperson said the Chamber's accusation of secret negotiations was false, and that the Chamber had a "history of making inaccurate claims about USTR under the Biden-Harris administration."
Any move to open talks with Colombia, Mexico or Canada by the Biden administration may not be completed before President Donald Trump takes office on Jan. 20 -- even as a "side-letter" to core text that would not require congressional approval.
But Trump took a critical view of ISDS provisions in trade deals. His trade representative, Robert Lighthizer, sought to eliminate them in a revamp of the North American Free Trade Agreement, saying they were akin to political risk insurance that encouraged the outsourcing of U.S. jobs to low-wage countries.
In the succeeding U.S.-Mexico-Canada Agreement negotiated by Lighthizer and enacted in 2020, ISDS was eliminated completely between the U.S. and Canada, and largely with Mexico except in certain large state-dominated sectors such as energy and telecoms.
ISDS remains fully available in the U.S.-Colombia free trade agreement, and the country's leftist president, Gustavo Petro, has made comments suggesting he wants to renegotiate the provision that has led to large damage claims by U.S. firms.
The letter from Democrats cites demands from American and Canadian mining companies of $16.5 billion in damages over Colombia's creation of a national park to protect the Amazon (NASDAQ:AMZN) rainforest and prohibit mining. They called the claim "exorbitant" on an investment amounting to only $11 million.
"We urge you to work with any willing trade partners to end the ongoing harm caused by ISDS," the lawmakers wrote, adding that this could be achieved with bilateral executive agreements.