NAFTA talks make little headway as U.S. updates objectives for ISDS reform

Marney Cheek is quoted in a Global Arbitration Review article examining the Administration's updated objectives with regard to the reform of investor-state dispute settlement (ISDS). According to Cheek, the reference in the objectives to finding a “meaningful procedure for resolving investment disputes” echoes the wording used by Congress in the Trade Promotion Authority Act, which defines the U.S. negotiating objectives for any trade agreement, but with the additional stipulation that it should protect U.S. sovereignty and its domestic industry. She says that while a robust ISDS system, U.S. sovereignty and a strong U.S. domestic industry all currently co-exist, that does not appear to be what the Trump Administration has in mind. 

Cheek adds that when read in light of reports that the Administration has proposed eliminating scope for ISDS claims relating to indirect expropriation and alleged breaches of fair and equitable treatment, the latest proposals, however vaguely worded, are a “dramatic departure” from the ISDS provisions of past U.S. agreements and the U.S. Model BIT and represent a “curtailment” of the system." She says, “I think many in Congress would find the proposals to fall far short of ‘meaningful procedures for resolving investment disputes’ and the business community is certainly united in its view that the proposals are inadequate."