US resolves 3-year debate on investment treaty terms

The US government has resolved a three-year debate over what terms it should seek in Bilateral Investment Treaties (BIT) with countries such as China and India, the U.S. Trade Representative's office said on Friday.

The Emergency Committee for American Trade, a U.S. business group, immediately welcomed the announcement but said it was worried that environment and labor provisions of the so-called "Model BIT" that will be used as template in future negotiations "could be counterproductive."

The United States and other countries negotiate bilateral investment treaties to protect their companies against potentially unfair foreign government actions.

U.S. BITS generally require foreign governments to treat U.S. investors and their investments as favorably as they treat domestic investments or investments from other countries.

There are some 3,000 BITS in force around the world of which the United States is party to 40.

The administration of former President George W. Bush launched BIT negotiations with China and Vietnam in the waning months of its administration.

But responding to concerns raised by Democrats and labor groups, President Barack Obama's incoming administration put the negotiations on hold and instituted a review of the U.S. Model BIT in February 2009.

Copyright @Thomson Reuters 2012