The United States has more than 45 bilateral investment treaties that include investor-state dispute settlement (ISDS), but prior to the Trans-Pacific Partnership, only two partners to these agreements, Canada and Singapore, have been developed countries. The debate over the advisability of including ISDS continues, even though the North American Free Trade Agreement ushered in an era of transparency investment treaties. This paper argues that if ISDS were abandoned, governments might again be subject to strong political pressures to formally or informally espouse investor claims and such claims would become the key factor in their foreign relations with host countries. The creation of an ISDS mechanism that relieves the US government from undertaking the settlement of investment disputes, and the evolution of US investment protection that is significantly more friendly to host governments and to regulation, are the principal themes of this paper.
