Reflections on today's State Department Investment Hearing
I testified at the Obama administration's hearing on the Model Bilateral Investment Treaty (BIT) program today at the State Department, along with many many corporate types.
The Model BIT is important because it also serves as a model for the investment chapter of U.S. "free trade agreements," which both basically incentivize the offshoring of jobs and investment by making it very very easy for U.S. corporations to set up shop in a developing country and not have to deal with such pesky matters as normal types of interactions with poor country governments.
You can read my testimony here, but essentially I laid out a few paths for reform of these provisions:
- End the BIT program and cut out the investment chapters. Easy, and perhaps desirable, but also a bit blunt.
- Reform specific provisions of the BIT and FTAs to allow for prudential regulation of financial markets and certain other exceptions. This solves certain problems, but importantly might fall too far below the radar screen to have the public feel that the administration is really living up to Obama's fair trade promises during the campaign.
- And the great middle path, the TRADE Act, which sets out a process for the GAO to discover the facts of the job impacts of trade and investment provisions, while also laying out an investment chapter of trade deals that would garner broad support from the American public.