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1 1 (December 5, 2016)

handle is hein.crs/govcazv0001 and id is 1 raw text is: 0.;0 , ri - . $ ,- , - --. , p\w gnom ggmm mppm qq\ , q I aS 11LIANJILiN, Updated December 5, 2016 U.S. International Investment Agreements (IIAs) The United States, a major source of, and destination for, foreign direct investment (FDI), is party to binding international investment agreements (IIAs) with over 50 countries. These treaty agreements reduce FDI restrictions, ensure nondiscriminatory treatment of investors and investment, and aim to balance other policy interests (such as safeguarding a host government's right to regulate in the public interest). While some World Trade Organization (WTO) agreements address investment issues in a limited manner, IIAs, in the form of bilateral investment treaties (BITs) and investment chapters in free trade agreements (FTAs), are the primary tools for promoting investment and protecting investors. The over 2,600 IIAs in force globally, form a complex, overlapping network of investment rules. Role of Congress. BITs require Senate approval and FTAs require approval by both Houses to enter into force in the United States. Congress sets U.S. investment negotiating objectives, most recently in the 2015 Trade Promotion Authority (TPA) (P.L. 114-26), which reaffirmed principal U.S. negotiating objectives to reduce or eliminate foreign investment barriers and to ensure that foreign investors do not receive greater substantive rights for investment protections than U.S. investors in the United States. The Department of State and U.S. Trade Representative (USTR) co-lead U.S. investment negotiations using a Model BIT template, revised in 2012 (Box 1). Box I. Basic Provisions of U.S. IAs Market access for investments, Nondiscriminatory treatment of foreign investors and investments compared to domestic investors (national treatment) and those of a third country (most-favored-nation treatment). Minimum standard of treatment (MST) in accordance with customary international law, including fair and equitable treatment and full protection and security. Prompt, adequate, and effective compensation for direct or indirect expropriation, with safeguards allowing for nondiscriminatory regulation in the public interest. Timely transfer of funds into and out of the host country without delay using a market rate of exchange. Limits on performance requirements that, for example, condition investment approval on using local content. Investor-State Dispute Settlement (ISDS) for lbinding international arbitration of private investor claims against host country governments for violation of investment obligations, along with transparency requirements of ISDS proceedings. Exceptions such as for national security and prudential interests. U.S. hlAs. The United States has in force BITs with 40 countries and 14 FTAs with 20 countries (Fig. 1), most with investment chapters, and often viewed as more comprehensive and higher-standard than those of other countries. U.S. IIAs cover about one-fifth of U.S. FDI stock abroad (Department of Commerce). Historically, U.S. IIAs have focused on developing economies, aiming to protect U.S. companies investing in countries with weak legal regimes, and/or insufficient protection for private property. More recent U.S. investment agreements and negotiations involve larger U.S. trading partners. Figure I. U.S. International Investment Agreements Source: USTR and the Department of State information. Status of U.S. investment negotiations. In February 2016, the United States and 11 other countries signed the Trans- Pacific Partnership (TPP), a proposed Asia-Pacific regional FTA. Congress must pass implementing legislation for the agreement to take effect in the United States. TPP's investment provisions reflect compromise among the negotiating parties, as well as efforts to target concerns of some stakeholders. The TPP text carries over core investor protections common in prior U.S. IhAs and contains some new features, such as: * clarification of MST and certain other provisions; * greater affirmation of governments' right to regulate; * expanded provisions on ISDS proceedings (e.g., rules for dismissing frivolous suits, third-party submissions, and arbitral qualifications, and code of conduct); and * exemption of tobacco control measures from ISDS. President-elect Trump has announced his intent to withdraw from TPP once in office, making its future uncertain. Nonetheless, investment issues in trade agreements will likely continue to draw congressional attention. They include issues such as balancing investor protections with other interests, including governments' right to regulate for environmental, health, and other objectives. Prospects also are unclear for the Transatlantic Trade and Investment 'N \:X t+ .O 'T

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