U.S. businesses and investors operating abroad often face a heightened risk of bias and discrimination. Investor-state dispute settlement (ISDS) is a mechanism that provides neutral international arbitration to ensure that Americans doing business abroad receive the same kinds of protections – such as protection from discrimination and expropriation without compensation – that are available to companies and investors doing business in the United States under U.S. law. This mechanism allows for an impartial, law-based approach to resolve conflicts and promotes development, rule of law, and good governance around the world. TPP also serves to modernize and reform ISDS by including clearer language and stronger safeguards that raise standards above virtually all of the other 3,000 plus investment agreements in force today.

THE BASIC FACTS ON ISDS

• TPP specifically protects the right of governments to regulate in the public interest. We would never negotiate away our right to do so, and we don’t ask other countries to do so either. This is true for public health and safety, the financial sector, the environment, and any other area where governments seek to regulate.
• ISDS ensures that American businesses and investors do not face discrimination, nationalization, or abuse when doing business abroad. Through TPP, we can put in place higher standards and stronger safeguards for ISDS.
• ISDS is found in more than 3,000 existing agreements around the world, covering 180 countries. The U.S. has negotiated 51 agreements with ISDS over the last 30 years.
• The United States has never lost an ISDS case. We have had only 13 cases brought to conclusion against us, and the United States has prevailed in every case. And in part because we have continued to raise standards through each agreement, in recent years we have seen a drop in ISDS claims, despite increased levels of cross-border investment. Only one new case has been brought against the United States in the last five years.
• More than half of the companies that initiate ISDS cases are small- and medium-sized businesses or individual investors, so the millions of American workers they employ stand to potentially benefit from strong ISDS protections.