Elizabeth Warren Says Trade Deal May Force U.S. Payouts to Overseas FirmsKathleen Miller
A nearly completed trade agreement among 12 Pacific Rim nations may require U.S. taxpayers to finance settlements to multinational corporations that say U.S. regulations hurt their companies, Massachusetts Senator Elizabeth Warren said Wednesday.
Warren, a Democrat, said the Trans-Pacific Partnership includes a clause allowing overseas companies to fight U.S. laws before international arbitrators, which she has said could lead to settlements worth billions of dollars. The payouts would be funded by the U.S. government and might allow foreign companies to weaken U.S. environmental, safety and labor rules, she said in a conference call with reporters.
“With more and more multinational corporations headquartered abroad, it is only a matter of time before such a challenge does serious damage here in the United States,” Warren said. The provision “should raise alarm bells for everyone. Giving foreign corporations the right to challenge our laws outside our legal system is a bad deal.”
President Barack Obama, whose goals in the final two years of his term include completing the Pacific trade deal, also is pressing lawmakers to support legislation setting up a fast-track process for congressional approval of trade accords. So far, much of the backing has come from congressional Republicans, putting him at odds with such typical allies as Warren and Senate Democratic leader Harry Reid of Nevada.
“The president has made a firm commitment to both Democrats and Republicans that any sort of trade agreement that he signs on to will be one that he firmly believes is clearly in the best interest of American businesses and American middle-class families,” Josh Earnest, a White House spokesman, said during Wednesday’s press briefing in Washington.
Warren has emerged as a leader among Democrats opposing the Pacific Rim trade deal. She wrote an opinion article for the Washington Post last month blasting the use of investor-state dispute settlements, the provision she criticized on the press call today. The White House has defended it.
Jeff Zients, White House National Economic Council director, wrote a piece for the White House website, saying it is “an often repeated, but inaccurate, claim” that the provision would allow companies to weaken labor or environmental standards.
Obama is seeking the fast-track authority so that U.S. Trade Representative Michael Froman can finish negotiations on the Trans-Pacific Partnership. The agreement includes rules on trade in services, intellectual property and international data flows. Froman has said he wants to close out the talks in the next few months.
A separate negotiation with the 28-nation European Union is on a much slower timetable.
Froman’s office issued a question-and-answer sheet Wednesday that said U.S. taxpayers have never been required to pay large damage awards under the investor-state dispute settlement process.
The provision is “part of dozens of international agreements that the United States currently has in place,” the document said. “Only 13 cases have been brought to conclusion - - and the U.S. has won all of these cases.”
It also said foreign companies couldn’t use the process to successfully challenge U.S. policies such as an increase in the minimum wage.
Separately, the AFL-CIO said it and affiliated unions are freezing all PAC contributions to federal candidates “until further notice” to conserve resources for the “historic legislative battle” over efforts to fast-track congressional approval of trade deals and the Pacific trade agreement.
The labor group said in an e-mailed statement that it will fight any trade deal that “fails to prioritize the needs of working families and advance shared prosperity in the global economy.”
Earnest, the White House spokesman, said the Obama administration understands “that there are some groups that have traditionally been aligned with the Democratic Party that are very skeptical of any sort of trade deal.”