The United States Needs Fair Referees for International Disputes

Bryan Riley / January 11, 2011

Last night’s BCS Championship game pitted the Auburn Tigers from the Southeastern Conference (SEC) against the Oregon Ducks from the Pac-10. To guard against biases that could have influenced the game’s outcome, officials were provided by the Big 10.

If football-crazed fans from Auburn and Oregon can understand why referees from the SEC and Pac-10 shouldn’t call the BCS Championship game, surely legislators can understand why investors shouldn’t have to rely on potentially biased officials to mediate international investment disputes.

Not everyone sees it that way. Critics of the proposed Korea–U.S. Free Trade Agreement (KORUS) allege that it gives South Koreans who invest in the U.S. economy greater rights than Americans who invest in the U.S. economy.

On closer examination, these “special” foreign investor privileges aren’t very special. Under KORUS, if a U.S. company believes its property has been stolen by South Korea’s government—or vice versa—it could submit its complaint to an international panel instead of being forced to rely on courts run by the very government that allegedly stole its property in the first place. According to KORUS: (more…)