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TPD > FTAA > United States Negotiating Positions - Summary > Position |
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Summary of the United States Negotiating Positions in the FTAA |
NEGOTIATING GROUP ON INVESTMENT Public Summary of U.S. Position Basic Definitions: In keeping with its traditional position, the United States has defined "investment" broadly, to include all forms of assets that have the characteristics of an investment, such as companies, stock, certain forms of debt, certain concessions, contracts and intellectual property. Scope: The United States takes the position, consistent with its general practice on this topic, that the definitions and content of the commitments provide the scope of the investment chapter, and that therefore no general statement of scope is needed. However, the United States proposes the FTAA Investment chapter include two specific provisions that are commonly included in U.S. investment agreements that limit the scope in specific areas. First, we seek a provision denying the benefits of the agreement to investments that are "shell" companies, or that or indirectly owned by investors from non-FTAA countries with which the United States does not maintain diplomatic relations or with which it has economic sanctions. Second, the United States also proposes a provision limiting application to events that take place once the chapter enters into force. National Treatment and Most Favored Nation Treatment: The United States proposes that the FTAA chapter on investment afford investors from an FTAA country, when they seek to initiate investment into the territory of another FTAA country and throughout the life of that investment, the better of national treatment or most favored nation (MFN) treatment when the investors are in like circumstances. With respect to sub-federal entities, the United States defines national treatment as the treatment a state or province affords to investors and investments from other states or provinces. These commitments would be subject to specifically described exceptions listed in annexes or protocols to the investment chapter of the FTAA. General Treatment - Fair & Equitable Treatment: The United States has not taken a position with respect to this standard. In the NAFTA and U.S. bilateral investment treaties, there is a minimum standard of treatment, apart from the nondiscriminatory standards, that countries must afford treatment in accordance with customary international law, including "fair and equitable" treatment and "full protection and security". While these concepts are commonly found in international investment agreements, other countries' use of these terms varies in content, applicability and enforceability. Accordingly, the United States will be carefully considering these principles, and will continue to consult closely with interested parties, before of taking any positions. Expropriation: The United States has not submitted a proposal, but supports classic expropriation disciplines, i.e., that expropriations must be for a public purpose, nondiscriminatory, in accordance with due process of law, and accompanied by payment of prompt, adequate, and effective compensation. The United States also has stated that the FTAA countries must have a common understanding of this provision's relationship with governments' role to regulate to protect health, safety and the environment. Compensation for Losses: The United States proposes two standard provisions for the investment chapter. The first provision makes clear that in the event of armed conflict and similar national emergencies, the national treatment and most-favored-nation standards would apply with respect to losses suffered by investors. The second provision, consistent with customary international law standards, requires FTAA governments to compensate investors when their property is requisitioned, or unnecessarily destroyed by governmental troops or authorities. Managerial Personnel: The United States proposes two provisions on this topic. One provision provides nationals of one Party with the right to enter and temporarily stay in the territory of another Party for the purpose of establishing, maintaining, advising or providing other essential services to an investment. The second provision gives investors the right to hire their top managerial personnel without regard to nationality. Transfers: The United States proposes that investors have the right to transfer funds into and out of the FTAA host country without delay using a market rate of exchange. This covers all transfers related to an investment, including interest, proceeds from liquidation, repatriated profits and infusions of additional financial resources after the initial investment has been made. The United States proposes a standard exception to these commitments for the nondiscriminatory application of domestic law relating to matters such as bankruptcy, criminal offenses and trading in securities. Performance Requirements: The United States proposes prohibiting mandatory requirements to:
With respect to the first four requirements mentioned above, the United States would prohibit such measures when they are the conditions for obtaining incentives. The U.S. text includes certain exceptions to these prohibitions that appear in the investment chapter of the NAFTA. For example, we propose an exception with respect to the use or purchase of local content, and to the transfer of technology, for measures necessary to protect human, animal or plant life. We also propose very specific exceptions for measures to remedy competition problems, for government procurement and for aid and export promotion programs. |
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