Expanding Job Outsourcing and Corporate Attacks on Our Laws
The U.S.-China Bilateral Investment Treaty (BIT) is a prospective deal that has been under negotiation since 2008. The China BIT would make it easier for multinational corporations to outsource more American jobs to China. It includes special investor protections for U.S. corporations that would make it cheaper and less risky to relocate production to China, where wages are low and independent unions are non-existent.
It also includes the controversial corporate tribunals formally known as Investor-State Dispute Settlement (ISDS) — which would allow Chinese corporations operating in the United States to demand unlimited U.S. taxpayer compensation for U.S. laws and policies that claim violate their new treaty rights. The deal would grant new rights to Chinese multinational corporations to bypass domestic courts and directly “sue” the U.S. government before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by America’s taxpayers, including for the loss of expected future profits. These corporations need only convince the lawyers that a U.S. law or safety regulation that we rely on for a clean environment, essential services and healthy communities violates their new treaty rights. These decisions are not subject to outside appeal and the amount they can order taxpayers to give corporations has no limit.
According to Public Citizen’s new database on the footprint of Chinese investment in the United States, total investment reached more than $45 billion in 2016, including more than 40 acquisitions of American assets worth at least $50 million each, a high-water mark for inbound investment. Chinese investors have entered U.S. sectors similar to those in which foreign investors have launched the most egregious ISDS cases worldwide, such as energy and pharmaceuticals.
President Trump — who promised voters he would fix our broken trade policy, particularly with China — has conspicuously not announced U.S. withdrawal from the China BIT negotiations. Notably, Trump’s CabinetFor more than a year, Trump’s top economic advisor was former Goldman Sachs CEO Gary Cohn, who received a $285 million departure package from the corporation before joining the administration. Cohn reportedly shut down plans to terminate the China BIT negotiations in 2017. Public Citizen has documented Trump Cabinet members’ and top advisers’ longstanding financial entanglements with the Chinese government and government-connected firms.
The Trump administration has proposed eliminating ISDS in its NAFTA renegotiations, but thus far has failed to end the China BIT and its potential expanseion of the controversial system.
If concluded, the China BIT would be a dangerous expansion of corporate power, threatening consumers, workers and the environment. That’s why the Citizens Trade Campaign — a coalition of environmental, labor, consumer, family farm, religious, and other civil society groups representing 12 million members — has called for an end to negotiations.
Public Citizen Fact Sheets, Reports & Memos
- Reporter Memo: U.S. Trade Deficit for First Half of 2018 Likely to Be Largest Recorded in Years, With China Deficit on Track to Be Highest First-Half Ever Recorded (August 1, 2018)
- Press Release: As Commerce Secretary Ross Heads to China, Possible Conflicts of Interest Obscure Whether He Is Negotiating on Behalf Americans or His Own Business Interests (May 31, 2018)
- Report: Follow the Money: Did Administration Officials’ Financial Entanglements With China Delay Trump’s Promised Tough-on-China Trade Policy? (March 22, 2017)
- Trade Deficit Tracker: Trump’s Trade Deficits With China, NAFTA Countries and the World (February 7, 2018)
- Database: Chinese Investment in the United States (January 29, 2018)
- Fact Sheet: The U.S.-China BIT (March 7, 2017)
- The TPP Would Have Proved Useless in Countering China’s Risky Ambitions (December 2016)
Public Citizen Press Releases & Statements
- Statement: On Eve of China Tariff List Release, Does Trump Administration Have a Coherent Strategy to Deal With China Trade Deficit? (June 14, 2018)
- Statement: On Commerce Department Release of April 2018 Trade Balance Data Wednesday (June 5, 2018)
- Press Release: New Data Show Trump’s First Quarter 2018 China and Mexico Trade Deficits Largest on Record as All Eyes Focus on This Week’s Trade Discussions in China, Looming NAFTA Deadline (May 3, 2018)
- Press Release: In advance of China 301 Investment Restrictions, Public Citizen Unveils Comprehensive Database of Chinese Investment in the U.S. (April 25, 2018)
- Press Release: Trade Deficit Up 5 Percent in Trump’s First Year, Raising Stakes for Quick NAFTA Replacement Deal That Stops Outsourcing, China Trade Action (February 6, 2018)
- Press Memo: In His First SOTU, How Will Trump Bridge the Chasm Between the Populist Trade Pledges That Powered Him Into Office and His Actions as President? (January 29, 2018)
- Press Memo: Asia Trip Spotlights Chasm Between Trump Campaign Rhetoric on Trade and Action, Raising Political Stakes for Meaningful Deliverables (PDF) (November 2, 2017)
- Press Release: President Trump’s Executive Orders Formally Bury TPP’s Corpse, but What About TTIP, TISA, China BIT? (January 23, 2018)
- Lori Wallach Op-ed in The Hill: The Paradoxes and Pitfalls of Trump’s Trade Agenda (January 19, 2017)
- Press Release: Proposed U.S.-China BIT Treaty Would Expose U.S. Laws to Extrajudicial Attacks by Chinese Corporations Operating Here, Incentivize More Offshoring of American Jobs (July 10, 2014)
Civil Society Organizations Speak Out
- Letter: Hundreds of Academics Urge Trump to Remove Controversial ISDS From NAFTA and End China BIT and Other Deals With ISDS (Letter text here.) (October 25, 2017)
- Letter: Citizens Trade Campaign Outlines Priority NAFTA Changes, and Withdrawal from China BIT, in Letter to Trump. Letter available here. (January 13, 2017)
- Letter: Hundreds of Law and Economics Professors Urge Congress to Reject the TPP, China BIT and Other Prospective Deals that Include Investor-State Dispute Settlement (ISDS) (September 7, 2016)