economy and politics

Concern grows over new interpretations of the FTA with the United States

FTA

The recent actions of the Office of the United States Trade Representative (USTR) has generated concern in various sectors, especially after its efforts to negotiate new interpretations became known through press reports. of provisions related to investments in the Trade Promotion Agreement between the United States and Colombia, as well as the Agreement between Mexico, the United States and Canada (T-MEC).

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This situation has raised alarms about possible inconsistencies with national interests. and the lack of transparency in the efforts of the USTR.

For example, in a letter sent to President Joe Biden, several United States congressmen assured that The USMCA gradually eliminated many of the protections of the Investor-State Dispute Settlement (ISDS) mechanism.) that existed under the North American Free Trade Agreement (NAFTA).

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However, American negotiators, backed by Congress, included a three-year transition period for US companies with pre-existing investments could file claims under the above terms.

This measure was crucial in the face of various actions of direct expropriation and illegal practices undertaken by the Mexican government in recent years. An emblematic case is that of Vulcan Materials Company, which since 2018 has maintained lawsuits under NAFTA to recover losses derived from invasions, arbitrary closures and direct expropriation of its assets by the Mexican government.

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FTA

Ministry of Transportation

The USTR’s recent actions could arbitrarily weaken Vulcan’s legal positions and from other American investors who still face disputes with foreign governments.

(See: Restrictions and protectionism, obstacles for imports in Colombia)

According to various media reports, the USTR seeks to modify the interpretation of key provisions of the T-MEC, which could favor the government of Mexico by evading responsibilities for its actions, while making it less likely that U.S. investors will obtain fair results in arbitration proceedings.

It is not necessary to be an ISDS defender to recognize that these actions are contrary to the national interest“said the American congressmen about this initiative. There is a perception that the USTR is trying to resolve certain bilateral issues before the end of the current government, which could limit the ability of the next administration to achieve positive results in the bilateral relationship with Mexico.

(Also read: The most notable initiatives of AmCham Colombia during 2024)

Investment

Investment

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Furthermore, it is worrying that neither Congress nor the affected actors have been adequately informed or consulted about these negotiations. “U.S. trade laws and existing precedents require the USTR to regularly consult with lawmakers on issues affecting the country’s investment obligations in trade agreements.“they stressed.

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Therefore, the lack of transparency and collaboration with Congress and interested parties is seen as a serious omission. In this context, It is considered imperative that the USTR not engage in discussions about possible changes with trading partners without prior congressional support.

It is highlighted that the agencies responsible for trade policy must always act based on the national interest of that country. Given the limited time for proper consultations before the end of the current Government, It has been urged that this issue be postponed until the next administration can review these interpretations.

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Investment

Colombian group investing

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Colombia Case

Regarding the situation, the president of the Colombian American Chamber of Commerce (AmCham Colombia), María Claudia Lacouture, He assured that the Colombian government has been working with the Americans on an interpretative note within Chapter 10 of the Free Trade Agreement.which refers especially to investment and which they intend to release in the remainder of the week.

(See more: The prospects for Colombian foreign trade during 2025)

As Lacouture explained, this modification within the chapter allows it to be done without having to go through Congress. However, he stressed that this has limits that cannot cross the line. “We do not know the modifications, but the Government wants it to come out before Donald Trump takes office as president“, said.

It should be noted that for María Claudia Lacouture the interpretive note process generates uncertainty, taking into account that it is not fully known what the modifications could be, which could limit the investment of the American giant in the country.

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