It’s Time to Exit ISDS: 200+ Labor, Environment, and Other Civil Society Groups Urge Biden to Eliminate Extreme Corporate Powers From Existing Trade Pacts

Today, more than 200 civil society organizations sent a letter to President Joe Biden urging him to “pursue an effective path to exit Investor-State Dispute Settlement (ISDS) by the U.S. and our partners in existing bilateral investment treaties and free trade agreements.” The groups argue that removing ISDS — which has prioritized corporate rights over those of governments, people, and the planet — is needed to protect policies necessary for a clean energy transition.

AFL-CIO, Sierra Club, and Public Citizen spearheaded the letter, with signers including United Steelworkers, Services Employees International Union, American Federation of Teachers, Amnesty International, Consumers Federation of America, Economic Policy Institute, National Resource Defense Council, League of Conservation Voters, BlueGreen Alliance, U.S. Public Interest Research Group, National Organization for Women, Center for Popular Democracy, and Oxfam America. See full letter and list of signatory organizations here.

“ISDS creates an unfair playing field that prioritizes the needs of corporations over those of workers, their families and the environment. ISDS should be removed from our trade framework and replaced with policies that promote good jobs, strong communities and a sustainable environment,” said Cathy Feingold, international director at the AFL-CIO.

“Our cross-sectoral movement has successfully shifted the debate on ISDS, and President Biden has rightly acknowledged that ISDS does not belong in any future agreements,” said Melinda St. Louis, Global Trade Watch director at Public Citizen. “Now we’re calling on the Biden administration to work with us to finish the job by removing extreme corporate rights from existing agreements and sending ISDS into the trash bin of history, where it belongs.”

The letter comes the day before Biden is scheduled to host Latin American heads of state at the White House for a meeting of the Americas Partnership for Economic Prosperity (APEP) and a day after Sen. Warren (D-MA), Sen. Whitehouse (D-RI), and Rep. Cohen (D-TN) led 40 colleagues in sending a letter to the Biden administration urging the administration to use the APEP process to work to remove ISDS from existing agreements in the region.

Last week, a new report detailed the specific legal mechanisms available to terminate ISDS liability between the United States and APEP countries with ISDS-enforced pacts. (These are the APEP countries, with those with U.S. ISDS pacts underlined: Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay.) And earlier this year, Sen. Warren (D-MA) and Rep. Doggett (D-TX) led 30+ of their colleagues in a letter calling for the elimination of ISDS with countries in Latin America, which has seen an explosion of expensive ISDS attacks.

“We must end corporations’ ability to sue for billions of dollars when climate and public interest policies threaten their profit margins,” said Iliana Paul, senior policy advisor at the Sierra Club. “Investor-State Dispute Settlement schemes create a system of gross corporate power, and eliminating this mechanism from existing trade and investment agreements is key to protecting people and the planet. President Biden’s position on this critical trade issue is encouraging, and we hope the administration keeps ISDS top of mind when revisiting global trade arrangements.”

Background: The ISDS provisions embedded in numerous trade and investment agreements, give special rights to multinational corporations that are not available to domestic businesses. If a corporation alleges that a government action violates their special corporate rights, ISDS provides the corporation the ability to sue a government for compensation outside of the countries’ domestic legal and court systems. An unaccountable three-person tribunal decides the fate of each case, with claims often in the millions or billions of dollars.