Be Thankful It's <em>British</em>, not <em>Canadian</em>, Petroleum

San Francisco -- As we wait for President Obama's speech tonight on the oil catastrophe in the Gulf, it's important to understand that many of the options he has discussed -- from requiring BP to set funds aside in escrow for cleanup to asking Congress to raise the liability limit on oil companies -- are possible only because BP is a British, as opposed to a Canadian or Mexican, company. That's because under the North American Free Trade Agreement (NAFTA) the so-called "investor-protection clauses" would allow a Canadian or Mexican oil company that caused a gusher on the floor of the Gulf to appeal any change in the liability or responsibility it faces to a trade tribunal. Such a tribunal would likely overturn, for example, an after-the-fact raise in the liability limit (or in the royalties companies had to pay).

But since the U.S. does not have a free-trade agreement with Britain, BP can't hide behind these trade tribunals.

Yet, here in San Francisco this week, the Obama administration is engaging in its first trade negotiations (the Trans-Pacific Partnership), and these investor-protection clauses that give foreign companies immunity from more stringent environmental or safety regulations are still on the table.

The Trans-Pacific Partnership could deliver a new model of trade agreement that reflects the kind of policies that candidate Obama championed -- one of his campaign promises was to do away with excessive investor-protection clauses. But there are companies like BP in the room here in San Francisco -- the U.S. Chamber of Commerce is sponsoring the biggest reception -- and they will be pushing hard for the same "get out of jail free" card that came with NAFTA.