US resolves int’l trade template debate

By Doug Palmer ,Reuters

WASHINGTON — The U.S. government on Friday said it has resolved a three-year internal debate over how strongly to press countries such as China and India to protect workers’ rights and the environment in negotiations on treaties to protect U.S. foreign investment.

The U.S. State Department and the U.S. Trade Representative’s office issued a joint statement outlining a so-called “model BIT” (Bilateral Investment Treaty) that will be used as a template in future negotiations. They said new language “will help achieve several important goals of the Obama Administration (such as) ensuring that U.S. companies benefit from a level playing field in foreign markets, providing effective mechanisms for enforcing the international obligations of our economic partners, and creating stronger labor and environmental protections.” The Emergency Committee for American Trade (ECAT), a U.S. business group, welcomed the announcement and called for quick resumption of investment talks with China, India, Vietnam and Mauritius that have been on hold. But the group, whose members range from heavy equipment manufacturer Caterpillar to publisher McGraw-Hill , said the stronger U.S. labor and environment demands in the model BIT “could be counterproductive” because they go much further than what other developed countries demand in their investment pacts.

“ECAT is concerned that these labor and environment provisions set a bad precedent and may well undermine the United States’ ability to conclude BITs with developing countries and the very improvements in labor and environmental objectives that increased foreign investment would bring,” it said. The business group added it was “very disappointed that the new 2012 model BIT does not strengthen core protections for U.S. investors overseas.” The United States and other countries negotiate bilateral investment treaties to protect their companies against potentially unfair foreign government actions.