NAFTA 2.0: ISDS Supports U.S. Oil, Natural Gas, And Electricity Companies

April 29, 2018

As we move forward crafting North American Free Trade Agreement (NAFTA) 2.0, we must be very careful to maintain current provisions that will continue to make the U.S. more secure. For example, Russia working with China, India working with Iran, mandates not just that U.S. energy security begins at home but it really begins in North America, uniting with energy-rich friends Canada and Mexico.

Sweeping away trade barriers, the trilateral NAFTA agreement has forged more stability and greater investment among the North American partners. The massive benefits are undeniable: U.S.-Mexico Trade Facts U.S. goods and services trade with Mexico totaled an estimated $616.6 billion in 2017. Exports were $276.2 billion; imports were $340.3 billion. And "trade with Canada and Mexico supports 14 million American jobs."

Thanks to NAFTA, our energy security blanket is the integrated and interdependent North American oil, natural gas, and electricity markets, built on connecting infrastructure and trade across the borders of the U.S., Mexico, and Canada. For Americans, NAFTA has meant more options for affordable and reliable energy, and U.S. companies have prospered from increased competitiveness operating and investing in our northern and southern neighbors.

NAFTA's provisions that buoy no tariffs on exchanged goods, trade liberalization, and market access must remain in the new version. But, the most important NAFTA 2.0 effort is to retain the Investor State Dispute Settlement (ISDS) provision. Critically, this protects U.S. investors, including energy companies, from unfair treatment and asset seizure by host nations. Protecting U.S. direct foreign investment, ISDS is "meant to protect investors from government intervention." Weakening or eliminating ISDS, by modifying it or by the U.S. withdrawing from NAFTA, would threaten U.S. energy security.

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