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AFL-CIO, More Than 40 Other Organizations Call for Public Consultations on Investor Rights in Trade Deals

“A threat to our sovereignty,” “corporate power grab,” “extraordinary investor rights.” You may have heard all these phrases in connection to trade agreements, but what do they really mean? 

U.S. trade policy has for years been designed so that the bulk of the benefits skew toward giant, global corporations and the bulk of the downside weighs on America’s working families and their communities, so it’s understandable that many see these deals as “corporate power agreements.” 

But there’s one provision in particular that grants special legal rights and privileges to foreign-based business interests. It’s called “investor-state dispute settlement” (ISDS), a complicated term for a very undemocratic process. And it’s this process that so many Americans are worried about. 

That’s why 42 small business, family farm, environment, good governance, faith-based, public health and other associations joined with the 12.5 million men and women of the AFL-CIO (and three legal scholars) to urge the U.S. Trade Representative to do exactly what its European counterpart is doing: Hold a public consultation process to review and revise this flawed process. Shouldn’t the U.S. government be at least as democratic, participatory and transparent as any other in the world? 

The United States and other countries have used this ISDS system for years—incorporating it into trade and investment deals with countries around the world, usually using the argument that U.S. and E.U. investors wouldn’t be treated fairly by other governments. Now the United States and Europe propose to put this mechanism into a deal with each other. But both Europeans and Americans admit that each other’s courts are reliable and trustworthy.  

The European Commission (the executive branch of the European Union) responded to massive citizen concern about ISDS by instituting a “public consultation” process to discuss the validity of ISDS and possible reforms to improve it. Yet, even as it moves ahead to negotiate a trade and investment deal with Europe (called the TTIP), the U.S. executive branch has been silent on the issue. Millions of Americans are hoping it will respond to this request and immediately initiate open and fruitful discussions on ISDS.  

Read more about ISDS here

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