As the San Francisco Giants walked onto the field at Kauffman Stadium in Kansas City last night, they knew it had been 35 years since a team had won game seven of the World Series on the road. Yet, the Giant players were confident that their chances of winning were based on their performance and talents – not because the umpires on the field were biased toward the home team and provided special advantages to or favor the home team.
Whether you woke up this morning excited by the Giants win or disappointed that the Royals did not clinch their first World Series since 1985, last night’s World Series game displays a core element of the American psyche – the importance of fair referees that will arbitrate wins and losses without regard to a home field advantage.
And that is ultimately what investor state dispute settlement is all about.
You’ve probably seen lots of blogs and articles in recent weeks, particularly as the controversy over this more than 30-year old enforcement tool has erupted in Europe (even though it was Europe that created it). For manufacturers, investor-state dispute settlement (or ISDS if you like acronyms) is not really that complicated at all. It is about making sure that foreign governments keep their international commitments, respect private property and treat American manufacturers fairly and without discrimination.
Whether in countries like Ecuador or Venezuela that rank low on rule of law by Freedom House and Transparency International or well-established democracies where investors are concerned that local courts will give a home court advantage to the government whose actions they are challenging, ensuring a neutral and non-politicized resolution of a dispute is fundamental.
To succeed in an increasingly tough and competitive global economy where growth forecasts are falling, manufacturers oftentimes need to invest to reach the 95 percent of customers that live outside our markets or to be involved in projects and access resources outside our borders. Data collected by the U.S. Bureau of Economic Analysis demonstrates annually that growing investment overseas is a huge driver of exports, higher-paying American jobs and increased research and development and capital investments in the United States.
To succeed and bring benefits back home, manufacturers need to ensure that foreign governments will treat them fairly and respect the most fundamental of rights on which our own Constitution was based. Investor state dispute settlement is a vital tool because its helps our manufacturers get a fair shake in the global economy.
If you want to learn more about this topic come join me at the Center for Strategic & International Studies tomorrow morning for a reality check on investor-state dispute settlement. And take a look at this piece by NAM President and CEO, Jay Timmons.