Some Democratic lawmakers have urged the U.S. administration to exclude foreign investment protections from major free trade agreements, warning they might undermine buffers against future financial crises and hurt public support for trade deals. Rules allowing foreign companies to sue host governments for unfair treatment have become contentious after recent high-profile cases, such as tobacco company Phillip Morris's challenge to Australia's plain packaging laws for cigarettes. Senator Elizabeth Warren, a staunch advocate for tougher scrutiny of Wall Street, said such rules would expose "critical" U.S. financial regulations to challenge and dissuade policymakers from writing rules that impact foreign banks. Warren and fellow senators Tammy Baldwin and Edward Markey wrote to U.S. Trade Representative Michael Froman on Dec. 17 urging him not to include investment protection rules in the 12-nation Trans-Pacific Partnership (TPP). "The consequence would be to strip our regulators of the tools they need to prevent the next crisis," said the letter, released on Thursday. It also warned against rules limiting the use of capital controls or allowing open access for risky financial products. A USTR spokesman said the TPP would in no way limit the ability of governments to put in place strong consumer protections or to regulate financial markets and would include "specific provisions protecting regulation." Foreign investment protection is also a hot topic in a planned U.S.-Europe trade deal, prompting the European Union to call a halt to talks on that part of the pact while it consulted more widely. Five Democratic members of the House Ways and Means Committee, which has jurisdiction over trade, wrote to U.S. President Barack Obama on Wednesday urging him to exclude such rules from the Transatlantic Trade and Investment Partnership (TTIP) too. There was no need for investor-state dispute settlement in an agreement between developed countries with established court systems, and excluding them would be "more likely to generate broad public support," they wrote. (Reuters)