Free Trade Area of the Americas - FTAA

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Public
FTAA.soc/civ/77
May 23, 2003


Original: English

FTAA - COMMITTEE OF GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF
CIVIL SOCIETY

CONTRIBUTION IN RESPONSE TO THE OPEN AND ONGOING INVITATION


Name(s) John Murphy, Vice President, Western Hemisphere, U.S. Chamber of Commerce, and Executive Vice President, Association of American Chambers of Commerce in Latin America (AACCLA)

Mark Smith, Executive Vice President, U.S. Section of the Brazil-U.S. Business Council

Organization(s) U.S. Chamber of Commerce
Association of American Chambers of Commerce in Latin America (AACCLA)
U.S. Section of the Brazil-U.S. Business Council
Country United States of America

U.S. Chamber of Commerce
Association of American Chambers of Commerce in Latin America
U.S. Section of the Brazil-U.S. Business Council

Recommendations for the Investment Negotiating Group
Executive Summary

The U.S. Chamber of Commerce, the Association of American Chambers of Commerce in Latin America (AACCLA), and the U.S. Section of the Brazil-U.S. Business Council welcome this opportunity to present our views on the emerging Free Trade Area of the Americas (FTAA). We strongly support free trade in the hemisphere, and we have previously submitted recommendations to the Committee of Government Representatives on the Participation of Civil Society and to the previous seven meetings of the Americas Business Forum giving our perspective on how the agreement should be framed.

The FTAA should eliminate trade-distorting rules affecting cross-border investment within the region. Furthermore, FTAA countries should afford other FTAA countries the better of national treatment or most favored nation (MFN) treatment when the investors are in like circumstances. These protections should hold when they are initiating investment, as well as throughout the tenure of that investment. The FTAA agreements should endorse classic expropriation disciplines and afford investors the right to submit investment disputes to international arbitration. We would also like to express our approval and support for the exclusion of labor and environmental standards from the investment chapter of the FTAA.


 

U.S. Chamber of Commerce
Association of American Chambers of Commerce in Latin America
U.S. Section of the Brazil-U.S. Business Council

Recommendations for the Investment Negotiating Group

The U.S. Chamber of Commerce, the Association of American Chambers of Commerce in Latin America (AACCLA), and the U.S. Section of the Brazil-U.S. Business Council welcome this opportunity to present our views on the emerging Free Trade Area of the Americas (FTAA). We strongly support free trade in the hemisphere, and we have previously submitted recommendations to the Committee of Government Representatives on the Participation of Civil Society and to the previous seven meetings of the Americas Business Forum giving our perspective on how the agreement should be framed.

Specifically we recommend that the governments in the hemisphere agree during the Quito FTAA Ministerial to take the following actions to build a strong foundation for the final FTAA Agreement, including endorsing the following measures:

  • The FTAA chapter on investment should 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.

  • The FTAA Agreement should endorse 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 FTAA Agreement should provide 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. It should also give investors the right to hire their top managerial personnel without regard to nationality.

  • The FTAA Agreement should guarantee investors 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 FTAA Agreement should prohibit mandatory performance requirements to incorporate specified levels of local content; purchase or accord preference to domestically produced goods; restrict sales of goods or services within the host Party’s territory; balance exports and imports; export at specified levels; transfer technology; or act as the exclusive supplier of goods or services to a particular region or the world market.

  • The FTAA Agreement should support the right of investors to submit an investment dispute with an FTAA government to international arbitration as long as the provisions governing the arbitration mechanism are properly framed.

  • The FTAA Agreement should include provisions on transparency to make laws, regulations and administrative practices publicly available; to the extent practicable, to provide advance notice and comment periods for proposed laws, regulations and administrative practices; and to promptly respond to requests for information.

  • The FTAA countries should take the necessary steps to accede to arbitral conventions, including the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

  • The FTAA countries should take the necessary steps to accede to the OAS Inter-American Convention Against Corruption and deposit instruments of ratification with the OAS.

  • The FTAA should include provisions that address trade restrictive measures that affect trade in express delivery services that limit the ability of member countries to adopt any measure that directly or indirectly operates to nationalize, expropriate or deny the investor the value of its investment.

  • We would like to underscore the importance of - and reiterate our support for - the following recommendations, all of which were endorsed during the investment negotiation workshop at the VI Americas Business Forum in Buenos Aires, Argentina:

  • We support the recommendation established during the investment negotiation workshop at the 2001 VI Americas Business Forum that states that excludes labor and environmental standards in the text of the FTAA. While we support efforts to improve environmental protection, it is not appropriate to address this issue in the text of a trade agreement.

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