US business associations want better ISDS mechanism in next NAFTA

One hundred eleven US business associations, including seven from the oil and gas industry, said they would like to see robust market commitments and investment protections, enforceable through investor-state dispute settlement (ISDS), maintained and upgraded in a renegotiated North American Free Trade Agreement.

“The original NAFTA included basic access, protection, and enforcement provisions that have helped grow manufacturing, services, and agricultural industries by enabling our businesses to reach new consumers and to participate in foreign infrastructure, energy, and resource development projects,” they noted in an Aug. 8 letter to US Trade Representative Robert Lighthizer and four other Trump administration officials.

“The negotiations to modernize NAFTA provide an important opportunity to upgrade the agreement to improve protection and enforcement tools against the theft, discrimination, and unfair treatment of US property overseas,” it said.

The group urged US negotiators to move beyond baseline protection and enforcement provisions that were part of the original NAFTA, which nevertheless left coverage and enforcement gaps by:

• Ensuring intellectual property is fully protected, as it is in the US, as a protected investment.

• Guaranteeing all sectors receive the same protections and access to ISDS to enforce those protections.

• Improving US investment access in Canada and Mexico on a nondiscriminatory basis, including by locking in reforms that have opened markets since NAFTA was negotiated.

• Adding stronger disciplines against forced technology transfers and localization.

• Expanding access to ISDS enforcement for breaches of major investment contracts.

• Extending the enforcement period to at least 10 years after any potential termination of the agreement, to assure that American investments are protected appropriately and fully.

The group included the American Exploration & Production Council, American Fuel & Petrochemical Manufacturers, American Petroleum Institute, Independent Petroleum Association of America, Petroleum Equipment & Services Association, Petroleum Equipment Institute, and Texas Oil & Gas Association.

Contact Nick Snow at nicks@pennwell.com.

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