*

US senators say 'secret' talks would hurt investment

protections

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Many Democrats want to end investment tribunals in trade

deals

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Lawmakers grow increasingly concerned about last-minute

talks

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Time running out for reaching deals before Trump takes

office

(Adds source, media report on USTR consultations with Congress,

paragraphs 3-4)

By David Lawder

WASHINGTON, Jan 15 (Reuters) - A bipartisan group of

U.S. senators on Wednesday called on U.S. Trade Representative

Katherine Tai to stop "secret negotiations" with Mexico, Canada

and Colombia that they say would weaken investor protections in

some U.S. free trade deals during the Biden administration's

final days.

The letter, led by Senate Finance Committee Chairman Mike

Crapo, a Republican, and the panel's top Democrat, Ron Wyden,

said Tai was seeking to reach binding agreements on legal

interpretations of investment protections before President-elect

Donald Trump takes office on Monday.

A source close to the trade talks rejected the senators'

characterization of the talks as secret, insisting that the U.S.

Trade Representative's office had consulted members of Congress

despite no legal requirement to do so.

USTR officials did not respond to Reuters' request for

comment on the matter.

The Inside U.S. Trade newspaper quoted an unnamed USTR

official as also saying that there were consultations, but that

Congress had delegated the authority for trade deal

interpretations to the agency.

The talks may alter how investment disputes would be

handled in the U.S.-Mexico-Canada Agreement on trade (USMCA),

the U.S. Colombia Trade Promotion Agreement and the Dominican

Republic-Central American Free Trade Agreement (CAFTA-DR).

"Unfortunately, USTR is pursuing substantive changes to

congressionally approved trade agreements on an abbreviated

timeline, out of the view of the public, and without meaningful

congressional consultation," they wrote.

The USTR should conduct such negotiations under "robust

consultations with Congress" and seek to use any changes to gain

trade concessions with Mexico, Canada and other partners, the

senators said.

A spokesperson for Trump's transition team did not

immediately respond to a request for comment.

When the U.S. Chamber of Commerce first raised concerns

about the USTR discussions in December, the agency denied that

there were secret, formal negotiations underway.

Since USTR never announced the talks, the exact changes

that Tai is seeking have not been made public.

But Colombia's president, Gustavo Petro, has said he

wants to renegotiate the country's U.S. trade deal to end

investor-state dispute settlement (ISDS) provisions that allow

companies to use third-party tribunals to arbitrate investment

disputes, which have led to large damage claims against his

government.

DEMOCRATS ON BOTH SIDES

A group of 37 Democratic lawmakers in December urged Tai to

eliminate ISDS tribunals, arguing that they give corporations

too much power against legitimate government actions and make it

easier for them to move American jobs overseas.

But since then, a growing number of Republican lawmakers,

along with several Democrats, have decried the discussions,

arguing that weakening investment protections will undercut

American companies.

Last week 26 House of Representatives members, including 16

Republicans and 10 Democrats sent Tai a letter, expressing

concerns that the talks may end a USMCA provision that allowed

U.S. firm Vulcan Materials ( VMC ) to pursue claims against

Mexico over a new nature preserve that has impaired its

limestone quarry and port on the Yucatan peninsula.

The Vulcan quarry is a key supplier to infrastructure

projects in the southeastern U.S.

"What Mexico has done is stepped in and stolen this

property. It's expropriated it," Republican Senator Bill Hagerty

told Fox News Channel on Sunday, referring to the Vulcan quarry.

"And what Biden is doing here at the 11th hour is trying to hand

this over to Mexico."