{"id":296,"date":"2009-09-01T03:01:00","date_gmt":"2009-09-01T08:01:00","guid":{"rendered":"http:\/\/itn.mattrock.ca\/2009\/09\/01\/united-states-trade-representative-and-state-department-hold-public-hearing-and-solicit-written-comments-in-us-model-bit-review\/"},"modified":"2013-02-01T05:01:54","modified_gmt":"2013-02-01T11:01:54","slug":"united-states-trade-representative-and-state-department-hold-public-hearing-and-solicit-written-comments-in-us-model-bit-review","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2009\/09\/01\/united-states-trade-representative-and-state-department-hold-public-hearing-and-solicit-written-comments-in-us-model-bit-review\/","title":{"rendered":"United States Trade Representative and State Department hold Public Hearing and Solicit Written Comments in US Model BIT Review"},"content":{"rendered":"

By Elizabeth Whitsitt
\n2 September 2009<\/strong><\/p>\n

Last updated five years ago, the United States\u2019 Model Bilateral Investment Treaty (BIT<\/span>) is currently under review by the US Administration to ensure that it is consistent with the public interest and the overall U.S. economic agenda.<\/p>\n

As previously reported in the June 2009 edition of ITN<\/span>*, an investment subcommittee to the Advisory Committee on International Economic Policy (ACIEP) has been established to advise the ACIEP (and in turn the US government) on the BIT review. While the precise mandate of the subcommittee is somewhat elusive, one thing is certain \u2013 a number of perspectives regarding different aspects of the US Model BIT will be canvassed given the diversity of interests represented by those individuals sitting on the subcommittee. The subcommittee consists of some 27 advisors, including participants from labour groups, business organizations, academia, public policy groups, and the legal profession.**<\/p>\n

The investment subcommittee is expected to provide a report to the ACIEP at a meeting on 30 September 2009. The ACIEP will then determine whether further input from the investment subcommittee is required. Sometime after its September 30th meeting, the official ACIEP recommendation to the US State Department is expected to be made publicly available on the ACIEP website.<\/p>\n

In addition to seeking the views of the ACIEP, the Office of the United States Trade Representative (USTR) and the Department of State have solicited input from interested groups and individuals by way of written comments and participation in a public hearing concerning the US Administration\u2019s model BIT review.<\/p>\n

According to a recent press release from the USTR, more than 70 members of the public attended, and 17 people made statements, at the public hearing held on 29 July 2009. In addition, more than 50 written submissions*** have been made by various interested groups and individuals both inside and outside the United States.<\/p>\n

The written submissions highlight the tensions that exist regarding the proper balance the US Model BIT should strike among: (1) encouraging foreign investment; (2) allowing governments the discretion to develop and regulate their own economies; and (3) ensuring the equitable governance of investment disputes so that foreign investors are not privileged, procedurally or substantively, over domestic investors and citizens.<\/p>\n

At one end of the spectrum are written submissions which reflect on the importance of US-based global businesses to access customers in foreign and high growth markets as a way to strengthen the US economy. These comments tend to emphasize the importance of high-standard BITs as an essential element in strengthening the competitive position of the US in foreign markets and as a way of making the US a more attractive base for global business.<\/p>\n

In contrast, other written comments focus on the impact of the US Model BIT on the interests of the public (including consumers) in the United States and in other state parties to the BIT, particularly when it is a developing country. These submissions posit that BITs undermine development by incorporating provisions (substantive and procedural) that unduly favour investors at the expense of the public interest and the foreign state\u2019s right to regulate.<\/p>\n

Still other interested parties making written submissions appear to fall somewhere in between these two positions, recognizing the importance of BITs in encouraging and protecting foreign investments while at the same time making suggestions for reform so that governments are better able to develop and regulate their economies. Specific reforms to the US Model BIT in this category of comments include:<\/p>\n

\u2022\u00a0modifications to its objectives by referring to, among other things, the equitable governance of investment disputes based on judicial openness, independence, and accountability;<\/p>\n

\u2022\u00a0changes to its capital control provisions by permitting governments greater flexibility to use capital controls in the face of financial crises;<\/p>\n

\u2022\u00a0dispute-settlement provisions that place more stringent limits on the availability of international arbitration and investor-state dispute-settlement;<\/p>\n

\u2022\u00a0reforms to the exceptions available to state parties by incorporating more flexible exceptions for measures that aim to safeguard the financial system.<\/p>\n

*See \u201cUnited States reviews its model bilateral investment treaty\u201d, By Damon Vis-Dunbar, Investment Treaty News, 5 June 2009, available here: http:\/\/www.investmenttreatynews.org\/cms\/news\/archive\/2009\/06\/05\/united-states-reviews-its-model-bilateral-investment-treaty.aspx<\/a><\/p>\n

** See United States State Department website at http:\/\/www.state.gov\/e\/eeb\/adcom\/aciep\/sub\/index.htm<\/a><\/p>\n

*** To view written submissions see http:\/\/www.regulations.gov\/search\/Regs\/home.html#docketDetail?R=USTR-2009-0019<\/a><\/p>\n

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