Removing CAFTA-DR ISDS Mechanism Would Address Migration Root Causes, Prevent Corporate Outreach
March 22, 2024
Contact
Ada Recinos, Temporary Deputy Press Secretary, Federal Communications, ada.recinos@sierraclub.org
WASHINGTON, DC — The Sierra Club and 13 leading advocacy organizations have joined Rep. Linda Sánchez (D-CA) and Rep. Lloyd Doggett (D-TX), two senior Members of the Ways & Means Committee, in calling on the Biden Administration to remove the Investor-State Dispute Settlement (ISDS) mechanism from the Central America – Dominican Republic Free Trade Agreement (CAFTA-DR).
Foreign companies have used ISDS to deter democratically elected CAFTA-DR governments from implementing new policies that promote democracy, strengthen labor rights, and protect the environment.
By removing ISDS provisions from CAFTA-DR, the U.S. would promote a trade agenda that works to uplift democratic sovereignty in the region, correct fiscal budgets for emerging economies, and strengthen environmental protections and worker rights that would, thereby, help address the root causes of migration from the region.
The letter was signed by 47 Members of Congress including seven from the Ways and Means Committee. Signers include (in alphabetical order): Nanette Barragán (D-CA), Jamaal Bowman (D-NY), Cori Bush (D-MO), Greg Casar (D-TX), Judy Chu (D-CA), Danny Davis (D-IL), Rosa DeLauro (D-CT), Christopher Deluzio (D-PA), Mark DeSaulnier (D-CA), Lloyd Doggett (D-TX), Veronica Escobar (D-TX), Dwight Evans (D-PA), John Garamendi (D-CA), Jesús Garcia (D-IL), Daniel Goldman (D-NY), Jimmy Gomez (D-CA), Raúl Grijalva (D-AZ), Pramila Jayapal (D-WA), Henry Johnson (D-GA), Marcy Kaptur (D-OH), Ro Khanna (D-CA), Daniel Kildee (D-MI), Barbara Lee (D-CA), Summer Lee (D-PA), Ted Lieu (D-CA), Betty McCollum (D-MN), James McGovern (D-MA), Jerrold Nadler (D-NY), Eleanor Norton (D-DC), Alexandria Ocasio-Cortez (D-NY), Ilhan Omar (D-MN), Mark Pocan (D-WI), Katie Porter (D-CA), Ayanna Pressley (D-MA), Delia Ramirez (D-IL), Jamie Raskin (D-MD), Linda T. Sánchez (D-CA), Janice Schakowsky (D-IL), Adam Schiff (D-CA), Melanie Stansbury (D-NM), Shri Thanedar (D-MI), Rashida Tlaib (D-MI), Jill Tokuda (D-HI), Paul Tonko (D-NY), Nydia Velázquez (D-NY), Maxine Waters (D-CA), and Susan Wild (D-PA).
The letter was also endorsed by the following advocacy groups: Public Citizen, AFL-CIO, Citizens Trade Campaign, Endangered Habitats League, Friends of the Earth US, Greenpeace USA, Honduras Solidarity Network, Latin America Working Group, NETWORK Lobby for Catholic Social Justice, Oxfam America, Progressive Democrats of America, Pride At Work, R-CALF, Sierra Club, and Unitarian Universalists for a Just Economic Community.
QUOTES FROM REPRESENTATIVES
“As a member of Congress and a daughter of immigrants, I believe it is crucial to address the root causes of migration. We cannot just focus on border security; but we also need to tackle the reasons why people are leaving their homes in the first place,” said Congresswoman Linda T. Sánchez. “That’s why I’m urging the Biden Administration to remove the ISDS provision that currently allows big corporations to sue democratically elected governments. It is unfair and makes life worse for families in these countries. By getting rid of ISDS, we can focus on fair trade that will build a more stable and prosperous future for the people of Central America while also addressing the underlying factors of migration.”
“While it has correctly opposed the inclusion of ISDS in any future trade agreements, the Biden Administration should move forward in removing these provisions from existing agreements. Powerful multinational corporations continue using ISDS to intimidate small countries from strengthening health, environmental, and worker rights protections. A major example is U.S. company Honduras Próspera’s pending ISDS claim against the Honduran government, seeking nearly $11 billion, equal to about two-thirds of the country’s entire national budget, based on the repeal of a law that previously allowed the creation of an autonomous zone with separate governance system, regulations and courts. Making CAFTA-DR “ISDS-free” will send a strong message that the U.S. is serious about addressing economic inequality, promoting democracy, and tackling the climate crisis in this region,” said Congressman Lloyd Doggett.
QUOTES FROM ADVOCACY GROUPS
“It’s time to stop putting corporate profits over people and the planet. Too many powerful companies use ISDS to undermine environmental and climate policies — including policies that can create green jobs and lift up domestic manufacturing for the clean energy transition — in the name of recouping lost investments or speculative profits they allege will never materialize. We urge the Biden Administration to work with trade partners in Central America and around the world to take the necessary steps to end this harmful practice once and for all,” said Iliana Paul, Senior Policy Advisor for Industrial Policy and Trade at the Sierra Club.
“If the U.S. is serious about addressing the root causes of migration from Central American countries, it makes no sense to continue to allow multinational corporations to seek potentially billions from these small countries when they enact health, labor and environmental policies to protect their populations. President Biden has wisely recognized that ISDS is no longer an appropriate feature of international economic agreements. A broad coalition of labor, environmental, consumer, faith, and human rights organizations agrees, and believes It’s high time to work to remove it from existing agreements like the Central America Free Trade Agreement,” said Melinda St. Louis, Global Trade Watch director at Public Citizen.