Rep. Raúl Grijalva Advises Ecuador to “Distance Itself” From ISDS Corporate Adjudication
The article below was originally published in Spanish in the Ecuadorian periodical Ecuadorinmediato on March 7, 2018.
US Congressman Raúl Grijalva, a Democratic member of the US House of Representatives, urged Ecuador to “stand firm” and “distance itself” from Trade and Investment Treaties (BITs) “that include broad rights and privileges for multinational corporations at the expense of people and the planet.” In the letter below, Grijalva warned that there are “some greedy corporations and arbitration supporters who want to bully countries like Ecuador into once again accepting the treaties.”
Even the Trump Administration Supports the Elimination of Investor-State Dispute Settlement
By Rep. Raúl Grijalva
The people of Ecuador and of the United States of America share important social and economic ties. I am proud to stand with the hardworking Ecuadorian immigrants in my home state of Arizona who contribute to our communities and our local economy, and I proudly support trade between our countries. I voted alongside nearly every one of my colleagues in the U.S. House of Representatives to renew Ecuador’s trade preferences under the Generalized System of Preferences (GSP) program last month.
The people in the United States and Ecuador also share a desire to protect our environment, our health and our communities from bad corporate behavior. We all want to ensure that corporations that invest in our communities respect our laws and are held accountable when they do not.
That is why it is good news that the global tide is turning away from trade and investment treaties that include expansive rights and privileges for multinational corporations at the expense of people and the planet.
The controversial investor-state dispute settlement (ISDS) provisions included in these treaties – that empower corporations to attack our laws before panels of three corporate lawyers and can result in millions or even billions of taxpayer dollars to be paid to corporations – have lost favor in Ecuador, the United States, and in other countries around the globe.
Many of us in the United States applauded the Ecuadorian government last year when it terminated its remaining treaties that included ISDS, including the antiquated U.S.-Ecuador Bilateral Investment Treaty.
The Ecuadorian government’s decision to get out of ISDS-enforced pacts mirrors the current thinking among policymakers in the United States across the political spectrum.
Democrats like me in the U.S. Congress have long called for the elimination of ISDS from U.S. trade and investment pacts, but this isn’t simply a partisan issue. Eliminating ISDS is also a central demand of the Republican-majority National Conference of State Legislatures, and other associations representing U.S. state and local officials such as the National Association of Counties and the National League of Cities. U.S. small business organizations, hundreds of the nation’s leading legal and economics professors, and more here have come out against ISDS.
Stark criticism of ISDS has come from voices as disparate as the staunchly conservative U.S. Supreme Court Chief Justice John Roberts, Reagan-era associate deputy attorney general Bruce Fein, the pro-free-trade libertarian Cato Institute think tank, progressive U.S. Senator Elizabeth Warren (D-Mass.), Nobel laureate economist Joseph Stiglitz, unions and environmental groups.
The widespread opposition to ISDS was a major reason that the Trans-Pacific Partnership (TPP) – a deal negotiated by President Barack Obama that would have drastically expanded ISDS in the United States – never could receive majority support in the U.S. Congress.
Even the Trump administration – which I vehemently disagree with on almost every matter – appears to have received the political message that ISDS has to go. In its renegotiations of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, the Trump administration is now refusing to be bound by ISDS – a smart move if any renegotiated deal would ever have a chance of passing Congress.
Of course there are still some greedy corporations and ISDS supporters that want to bully countries like Ecuador into agreeing once again to trade and investment treaties that include ISDS, despite all the evidence of their harm and no convincing evidence of any benefit.
But those voices do not represent the position of the vast majority of people and policymakers in the United States.
The Arizonans who I represent do not want oil and gas giants to get away with polluting the environment or making people sick, whether that happens in their own desert backyard or in the mighty Ecuadorian Amazon. And, just like our sisters and brothers in Ecuador, the people in my state want to be able to enact laws that respond to emerging environmental or public health threats without having to face costly litigation outside our courts.
We want to end ISDS once and for all, and we encourage the Ecuadorian government to stand strong and do the same.
The Honorable Raúl Grijalva is a Democratic member of the U.S. House of Representatives, representing Arizona’s 3rd Congressional District and is Co –Chair of the U.S. Congressional Progressive Caucus.