U.S. negotiators are considering a new approach to the controversial investor-state dispute settlement mechanism featuring an opt-in clause that would allow each of the three NAFTA countries to decide whether to use the provision, sources told Inside U.S. Trade.
Does that mean a single chance to opt-in when the new NAFTA comes into force? Or do you get to reconsider your position as time goes on? Either way, this may not work as a political compromise. It probably won't make either side happy.
So what would work? I'm not sure, but I feel like USTR needs to pick from one of the following categories of options:
-- A version of ISDS/investment protection that is close to what was in TPP (but no tobacco carveout).
-- A scaled back investment chapter, e.g., one that only has state-state disputes and/or only has non-discrimination as an obligation.
-- No investment chapter at all (they could agree to revisit the issue down the road).
Ultimately, I don't think the new NAFTA's investment provisions are going to be the deciding factor in whether the negotiation is successful. It could succeed with or without it, or fail with or without it, with a number of other factors playing a bigger role.
