A set of documents purporting to capture the discussions of the United States–United Kingdom Trade and Investment Working Group from 2018 has recently been released into the public domain. The publication of these texts has prompted a renewed debate over the potential shape of a post-Brexit trade and investment deal between Washington and London.
The authenticity of the documents—which refer to meetings held up to a year ago—cannot be confirmed. They involve the meetings of a working group formed the year after the 2016 Brexit referendum, with the group tasked with smoothing post-Brexit trade and investment relations and preparing for formal negotiations.
One of the issues raised in these documents is that of investment dispute resolution. In recent years, the European Commission has been advocating for a MIC, while looking to garner support from other countries. Brussels has negotiated investment court systems (ICS) in its recent trade and investment agreements, in place of the ISDS mechanism used previously, which would serve as precursors for this eventual court. The EU has also proposed the MIC in the context of the UNCITRAL Working Group III process on ISDS reform.
According to the documents, the Office of the U.S. Trade Representative (USTR) has expressed concern over the proposed MIC and said that it would not be able to support such an approach in its talks with London. Should the United Kingdom support the proposed court, it could put a future trade and investment deal in jeopardy, the documents say. Washington also reportedly said that the changes to ISDS in the modernized NAFTA, now known as the USMCA, were not necessarily indicators of its stance in future talks, given the particularities of each negotiating context.
The United Kingdom cannot formally negotiate trade deals while it remains an EU member state, but it has been holding exploratory discussions with the United States and other interested countries to scope out what these deals might look like after Brexit. This past February, USTR released a summary of its negotiating objectives for such talks.
The section on investment in those negotiating objectives lists two main goals. The first is to “secure for U.S. investors in the UK important rights consistent with U.S. legal principles and practice while ensuring that UK investors in the United States are not accorded greater substantive rights than domestic investors.”
The second is to “establish rules that reduce or eliminate barriers to U.S. investment in all sectors in the UK.” The document does not refer to ISDS or any other system for resolving investment disputes, though it does have a section on state–state dispute settlement.