Our work: Balancing democracy & trade
Most policy campaigns are both local and global: climate, public health, decent work, even democracy itself. For three decades, our trade team has supported governments and NGOs that seek to balance democracy and trade. We work to preserve policy space for domestic innovation and support frameworks for global policy – like climate change and tobacco control. Our past clients and collaborators include the following.
- Nonprofit organizations
* Action on Smoking and Health (ASH)
* Citizens Climate Lobby
* Climate Leadership Council
* Corporation for Enterprise Development / Prosperity Now
* Forum on Democracy and Trade
* Friends of the Earth, USA
* Health Justice, Manila
* Heinrich Boell Foundation
* Mesa Tecnica de La Oroya, Peru
* Open Society Foundation
* Our World Is Not for Sale (OWINS)
* Presbyterian Church USA, World Mission –Peru
* Public Citizen
* Resources for the Future
* Sierra Club
* Southeast Asia Tobacco Control Alliance (SEATCA)
- University-based programs
* Boston University – Pardee Center
* Columbia University – Center for Sustainable Investment
* Tulane University – Public Law Center / International Legislative Drafting Institute
* University of Iowa – Rural Policy Research Institute (RuPRI)
- Government associations
* Council of State Governments (CSG)
* Intergovernmental Policy Advisory Committee (IGPAC)
* National Association of Attorneys General (NAAG)
* National Association of Counties (NACO)
* National Association of Development Officers (NADO)
* National Caucus of Environmental Legislators (NCEL)
* National Conference of State Legislatures (NCSL)
* International Municipal Lawyers’ Association (IMLA)
- International organizations
* Greens Group of the European Parliament
* International Labor Organization (ILO – Washington office)
* Public Services International (Ferney-Voltaire Cedex, France)
* South Centre (Geneva)
* Third World Network (Geneva)
* UN Economic Commission on Latin American and the Caribbean
- State commissions and agencies – oversight of national trade policy
* California Energy Commission
* California Coastal Commission
* California Senate – Subcommittee on International Trade & State Legislation
* Idaho House of Representatives – Office of the Speaker
* Maine – Maine Citizens Trade Policy Commission
* New Hampshire House of Representatives – Commerce Committee
* Vermont – Study Committee on International Trade and State Sovereignty
* Washington – Joint Legislative Oversight Committee on Trade Policy
* Utah – Utah International Trade Commission
International investment agreements
Foreign investors are using the 3,000 International Investment Agreements (IIAs) to challenge regulations in the public interest: tobacco controls, mining permits, hazardous waste regulations, and renewable energy policies, to name a few. For smaller countries, the cost of investment litigation alone exceeds their public health budget, so the mere threat has chilled progress on domestic regulation.
Several countries have limited their IIAs so that foreign investors do not have greater rights than citizens under domestic law. Our recent work explains the legal landscape and options for reform:
- Rethinking International Investment Governance – Matthew Porterfield, contributing author
- Exhaustion of local remedies – Matthew Porterfield
- Withdrawal of Unilateral Offers of Consent to Investor State Arbitration – Matthew Porterfield
- Foreign investor rights and customary international law – Matthew Porterfield
UNCITRAL Working Group – The United Nations Commission on International Trade Law (UNCITRAL) has created a negotiating forum, Working Group III, for Investor-State Dispute Settlement Reform. We support a network of negotiators from developing countries that are attempting to limit their exposure to claims from private investors under IIAs. We do this work in close collaboration with Georgetown’s Center for the Advancement of the Rule of Law in the Americas (CAROLA) and the Columbia Center on Sustainable Investment (CCSI).
We began our work by identifying reforms to IIAs that countries could adopt unilaterally or bilaterally. For example, options include a country’s withdrawal of consent to arbitration, waiver of rights by the investor, and placing limits on rights under project-specific investment agreements. Our most recent work is to develop a multilateral framework agreement that would enable countries to both limit their liability and jointly pursue sustainable development goals through foreign investment.
NAFTA investor rights in a local D.C. utility merger – In 2017, a Canadian holding company, AltaGas, petitioned the D.C. Public Service Commission (PSC) to merge with Washington Gas. The D.C. government, People’s Counsel, and other intervenors presented evidence that AltaGas was under-resourced and ill-positioned to transition the local natural gas utility to renewable energy sources by 2050 as required by D.C. policy. At the request of the D.C. Attorney General, we prepared testimony to explain Altgas’s investor rights under NAFTA, which it could later use to challenge D.C.’s carbon-free energy policy. In the end, Altagas made major concessions in terms of its capital structure and commitment to converting Washington Gas to renewable energy sources.
- Testimony on NAFTA Investor Rights in a Washington, D.C., Utility Merger – Robert Stumberg
Designing a carbon tax
The past five years were the hottest in recorded history, and greenhouse gas emissions continue to rise—unabated by negotiations and promises to limit the use of fossil fuels. The emerging consensus is that widespread carbon pricing is necessary to avoid catastrophic climate change.
Many major carbon-emitting countries—including the countries of the European Union, Canada, and China—are already developing and implementing their own carbon-pricing programs. More than twenty subnational governments have adopted carbon pricing. Yet there is widespread concern that carbon-pricing will cause “carbon leakage”—the loss of production and jobs to countries that do not tax carbon. This risk is avoided by adjusting carbon taxes at the border, which can be done in compliance with WTO trade agreements. The Harrison Institute is developing guidance on designing a carbon tax and models of international cooperation. We work in collaboration with Resources for the Future, the Citizens Climate Lobby, and the Climate Leadership Council. Our recent work includes:
- Border Adjustments for Carbon Taxes, PPMs, and the WTO, Matthew Porterfield, 41 U. Pa. J. Int’l L. 1 (2019).
- Framework Proposal for a US Upstream Greenhouse Gas Tax with WTO-Compliant Border Adjustments, Matt Porterfield, contributing author, with Brian P. Flannery, Jennifer Hillman and Jan W. Mares.
- Assessing the Climate Impacts of U.S. Trade Agreements, 7 Mich. J. Envt’l & Admin. L. 51 (with Kevin P. Gallagher and Judith Claire Schachter, 2017).
- Reconciling Trade Rules and Climate Policy, Matthew Porterfield, chapter 6 in Trade in the Balance: Reconciling Trade and Climate Policy (2016).
- Using Trade Rules to Reduce Fossil Fuel Subsidies, Harrison Institute working paper, Matthew Porterfield and Robert Stumberg.
International trade negotiations
In successive rounds of trade negotiations, multinational businesses proposed trade rules to limit regulation in the public interest. The sectors targeted by industry included renewable energy, tobacco, pharmaceuticals, banking, derivatives trading, and public funding for public services.
At the request of international coalitions, we analyzed the impact of proposed trade rules and developed proposals to preserve the traditional policy space for national and subnational governments. For example, our work to safeguard tobacco controls contributed to a carve-out of those laws from the investment chapter of the Trans-Pacific Partnership Agreement (TTIP). Other negotiations on which we contributed analysis have been suspended. These included the Trans-Atlantic Trade and Investment Partnership, the WTO negotiations on trade in services, the Trade in Services Agreement, and the Multilateral Agreement on Investment. A sampling of our work follows.
- Safeguards for Tobacco Control – Robert Stumberg
- Trade Policy Assessment for Maine – Robert Stumberg
- Will TiSA affect your services? – Robert Stumberg
- Guide to WTO negotiations on domestic regulation – Robert Stumberg
- WTO limits on regulation of food derivatives – Daniella Garreton, Mary Arutyunyan & Robert Stumberg
- GATS and Electricity – Robert Stumberg