Here's an exchange between Senator Sheldon Whitehouse (D-RI) and U.S. Trade Rep. Katherine Tai at a Senate Finance Committee hearing today (2:32:00):
Whitehouse:
The other thing I wanted to talk with you about is the loathsome ISDS process. We are not putting ISDS provisions into any new treaties, but they exist as hangovers from past treaties. I'm told that it's actually possible to remove ISDS from existing free trade and bilateral investment agreements and that you are looking at the best way to go about doing that. Can you give me a progress report on that? ... The quicker we can get rid of that, as a vehicle for putting private interest over public interest, and putting size and weight over virtue, the better off we will be, and I'd ask for your thoughts on how we can remove ISDS from those existing agreements and treaties.
Tai:
Well, I think we have a number of tools with respect to ISDS that, whether they're in bilateral investment treaties, or standalone, or they are incorporated into FTAs, we're looking at this question actively right now with respect to existing ISDS provisions ...
Whitehouse: So you have no report on ... ?
Tai: ... how they can be improved. Again, this is one of those things where we're very, very interested in the views of members of Congress, especially those who sit on the Judiciary Committee and are lawyers.
Whitehouse:
The US was responsible for pushing a lot of this ISDS nonsense into those treaties in the first place, correct?
Tai:
I think that's absolutely correct.
Whitehouse:
Well, godspeed. Stay in touch with us on the conclusions that you draw. I would add to my [Question for the Record] for any further information you have on this [that] might be useful to me and my team as we look to try to rid our trade agreements of this really noxious agreement.
I think of ISDS as more misguided than loathsome, but putting that aside, I was intrigued to hear that USTR is actively thinking about how to get ISDS out of existing trade agreements and investment treaties. What is the likelihood of anything happening here? What does the State Department, which has a big role to play on ISDS, think of all this?
ADDED:
A friend of mine argued that I was misinterpreting Tai, who only said she was considering improvements to ISDS, and did not mention removal herself. I emailed the USTR press office for clarification, and they replied as follows:
President Biden has made it clear that he does not support the inclusion of ISDS in new trade agreements. When Ambassador Tai has been asked by Members of Congress about removing ISDS from existing trade agreements, she has let them know she would like to work with them to identify the best path forward, respecting the role of Congress in such matters.
