Senate Should Protect United States From Frivolous Foreign Lawsuits

Washington, D.C. - The following statement is from Joe Theissen, Executive Director of Taxpayers for Common Sense regarding the Kerry Amendment on the investor protection provision of the Trade Promotion Authority bill:

We congratulate Senator John Kerry (D-MA) on his amendment and his efforts to protect taxpayers and United States sovereignty by narrowing the ability of foreign investors operating in the United States to bring lawsuits to overturn federal and state laws on a range of environmental and public health issues.

Since the passage of the North American Free Trade Agreement (NAFTA), foreign interests have filed several lawsuits seeking more than $1.8 billion in damages from Americans. This violation of U.S. sovereignty would convey rights to foreign investors that go beyond those given to American investors by federal law.

Lawmakers who vote against the Kerry amendment will be providing foreign interests the right to file frivolous lawsuits against the U.S. government to recover damages for having to comply with environmental, public health and other laws that American companies must follow. Not only can foreign companies sue, they can collect billions of dollars in “lost profits” from taxpayers. The prospect of imposing this new fiscal burden on U.S. taxpayers should be cause for grave concern during this period of major budget shortfalls.

If a legislative solution like the one contained in the Kerry amendment is not found, it is almost certain that many lawsuits will be filed and damages awarded in the future as new international trade agreements go into effect.

Since 1995, twenty-one such claims totaling $3.1 billion have been filed in the U.S., Mexico, and Canada under NAFTA. A recent Taxpayers for Common Sense study found that similar provisions in future trade deals could bring as much as $32 billion in annual legal claims against the United States.

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