For Immediate Release
Tuesday, August 31, 2010
Bipartisan Group of Legislators Ask Sen. Wyden to Defend Oregon Laws from Attack in International Tribunals
The Korea Free Trade Agreement Poses Serious Threat to State Sovereignty
Salem, Ore. — A bipartisan group of Oregon State Legislators sent U.S. Senator Ron Wyden (D-OR) a letter today urging him to use his position as chair of the Senate Subcommittee on International Trade to strip provisions from a pending trade agreement that threaten to expose Oregon laws to attack in international tribunals.
According to the letter, the pending Korea Free Trade Agreement “includes investor-to-state enforcement mechanisms that enable foreign corporations to directly challenge American laws, regulations and even court decisions as trade violations through international tribunals that completely circumvent the U.S. judicial system.”
Similar provisions in past trade agreements have been used to attack environmental, food safety and other public interest laws. As the letter points out, “provisions in the Korea FTA pose a much greater threat than similar language included in pacts with smaller, developing countries, in that South Korea is a capital-exporting nation with significant investments throughout the United States.”
Korean-owned businesses operating in Oregon in recent years have included a semiconductor plant, an animal feed processor and shipping companies. If the trade agreement passes as written, these and other Korean-owned businesses would be granted special privileges to initiate “regulatory takings” challenges of federal, state and local laws — privileges that are not extended to U.S. businesses or citizens operating in Oregon.
“The Bush-negotiated trade pact with South Korea poses a real threat to Oregon’s environmental and land use laws, as well as to basic principles of democracy,” said Arthur Stamoulis, director of the Oregon Fair Trade Campaign. “Senator Wyden should use his influence to insist that these harmful and unnecessary provisions be removed from the Korea proposal and any future trade agreement.”
The Korea Free Trade Agreement was negotiated and signed by the Bush administration in 2007, but the Bush White House was never able to get it through Congress. Despite speaking against it on the campaign trail, President Obama recently announced plans to press forward with the trade pact after the November election.
A complete copy of the letter and list of signers follows:
The Honorable Ron Wyden
United States Senate
223 Dirksen Senate Office Building
Washington, DC 20510-3703
August 31, 2010
Re: State Sovereignty and the Korea Free Trade Agreement
Dear Senator Wyden:
The pending Korea Free Trade Agreement includes extraordinary rights for foreign investors that, if enacted, threaten to expose Oregon laws to attack in international tribunals. These provisions are unnecessary and unfair, and we ask that you use your position as Chair of the Senate Subcommittee on International Trade to help strip them from the agreement before it moves forward.
Like several trade pacts before it, the Korea FTA includes investor-to-state enforcement mechanisms that enable foreign corporations to directly challenge American laws, regulations and even court decisions as trade violations through international tribunals that completely circumvent the U.S. judicial system. These tribunals routinely hear “regulatory takings” cases that would be thrown out of the U.S. courts — and are even used to attack laws that are applied equally to both foreign and domestic firms.
The investor-to-state provisions in the Korea FTA pose a much greater threat than similar language included in pacts with smaller, developing countries, in that South Korea is a capital-exporting nation with significant investments throughout the United States. In recent years, this has included businesses such as a semiconductor plant, an animal feed processor and a shipping company here in Oregon.
The only other capital-exporting nation the United States has signed a similar agreement with is Canada. It’s worth noting that Canadian firms have filed multiple cases challenging state and federal laws under the North American Free Trade Agreement, with billions of dollars in outstanding cases still awaiting final decisions. Even cases the United States successfully defended against required significant expenditures of taxpayer dollars in order to fight them.
The argument often made in support of including investor-to-state provisions in pacts with developing countries — that their court systems are too corrupt for U.S. investors to receive a fair shake — does not hold water in the case of South Korea, which has a stable court system and firmly-established rule of law. There is absolutely no reason to put Oregon’s laws at jeopardy under international tribunals, nor to grant foreign corporations greater rights than our own domestic businesses.
The U.S. Trade Representative should have heeded the National Conference of State Legislatures’ advice to “exclude an investor-state dispute provision from the U.S.-Korea investment chapter” back during the initial negotiations. Now that the Korea FTA must be renegotiated, the precedent set by the Australia Free Trade Agreement, in which investor-to-state provisions were left out altogether, should be included as a solid requirement.
We look forward to your leadership on this issue, and thank you for your attention.
Rep. Michael Dembrow (D-45)
Rep. Brad Witt (D-31)
Rep. Kim Thatcher (R-25)
Rep. Brian Clem (D-21)
Rep. Peter Buckley (D-5)
Sen. Diane Rosenbaum (D-21)
Sen. Chip Shields (D-22)
Rep. Paul Holvey (D-8)
Sen. Jackie Dingfelder (D-23)
Sen. Brian J. Boquist (R-12)
Rep. Val Hoyle (D-14)
CC: U.S. Senator Jeff Merkley
Congressman David Wu
Congressman Greg Walden
Congressman Earl Blumenauer
Congressman Peter DeFazio
Congressman Kurt Schrader
Ambassador Ron Kirk