EU Commissioner Defends Investor-State Provisions; NGOs Propose “Alternative Trade Mandate”

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European Union Trade Commissioner Karel de Gucht today (27 November) defended the inclusion of an investor-state dispute settlement provision in the Transatlantic Trade and Investment Partnership (TTIP). De Gucht argued the out-of-court settlements allowing private sector to sue governments were necessary because the TTIP would not per se give EU companies a standing in US courts.

“In the US, a trade agreement does not create a stance to litigate in a court,” de Gucht said.
He spoke at a session of the European Parliament Committee on International Trade (INTA) in Brussels.

Several observers from the Green Party called de Gucht’s explanation “astonishing.”

“We are checking this currently, but the notion that foreign investors would not be able to go to Court in the US is new to us,” the assistant to Green Party Member Ska Keller said.

Investor-state dispute settlement (ISDS), used in the past when negotiating with countries with which there was no well-established framework, are now just thrown into every agreement, an assistant of Keller’s colleague Carl Schlyter said. The US and EU both have well-established frameworks to settle cases in court or bring cases to the World Trade Organization.

When questioned by a Scottish Liberal MEP during the session today as to whether ISDS would make privatization of sectors like health a one-way street, de Gucht promised to check, but underlined that the “policy space certainly should allow to go in both directions.”

ISDS has come under some scrutiny recently as after inclusion in the just-concluded Canada-EU Trade Agreement (CETA). The Commission, according to de Gucht, now is considering going even further in ISDS, where possible, in TTIP.

INTA members were briefed on ISDS on 26 November in a technical briefing which was closed, according to the Commission’s calendar.

The spokesperson for de Gucht in a tweet today pointed to a summary [pdf] of the Commission’s approach to ISDS. Reforms on ISDS are necessary, de Gucht said.

The document points to a “re-balancing” by a two-pronged approach. There was a need to clarify the right “to regulate to pursue legitimate public policy objectives” and the meaning of “indirect expropriation” and “fair and equitable treatment.”

The second part is reform of how the system operates adding transparency and a code of conduct for private arbitrators.

Alternative Trade Mandate

While the Commission is preparing for the third round of the TTIP, a growing coalition of health, farmers and civil liberty organisations today launched an “alternative trade mandate,” heavily criticising the current trade negotiation agenda of the EU.

In the core document, the 50-plus organisations warn against the negative side effects for local users and consumers and heavily criticise the continued lack of transparency.

A strategy meeting of EU NGOs on TTIP is planned for 12-13 December, just before the next official TTIP round. A coordination meeting with US NGOs was in the making for next year, Peter Fuchs from the German NGO PowerShift said.

De Gucht assured the INTA Committee in today’s session that the Parliament would enjoy the same transparency as the Council of Ministers of the EU, yet the US was concerned about potential leaks of papers. Asked if there had been pressure to not share US negotiating positions with member states, de Gucht answered evasively.

Monika Ermert may be reached at

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  1. william Mupunga says

    Why is IP watch so silent about the ARIPO Administrative Council taking place in Kampala Uganda? I would have expected you to report something from there especially seeing that this year they also have a Council of Ministers taking place there.

  2. henk houweling says

    It is not surprising to understand what the corporate world wants: getting around national parliaments and judiciaries. After the MAI failed, the business world gives it a new try in the TTIP. Of course, neo-liberal European Union joins the US in both trade and resource wars. Corporate ideal is to rule of societies without political responsibility: its most preferred option.

    See what happened in the recent past:

    1) Australian government, that refused to agree with ISD clause. It was sued by a US tobacco company that saw the value of its investments in Australia declined due new health regulations compelling companies to print stern warnings on the package. However, the company found that Australia had an ISD clause in treaty with H Kong; the company relocated to HK and sued the Australian government ; [info from NHK world discussion on TPP, on September 14, 2014]

    From the same source

    2) Over $350 million in compensation has already been paid out to corporations in a series ofInvestor-State cases under NAFTA alone. This included attacks on natural resource policies, environmental protection and health and safety measures, and more. In fact, all of the 17 pending claims under only U.S. FTAs, seeking over $12.5 billion damages, relate to environmental, public health and
    transportation policy – not traditional trade issues. In several instances,
    arbitral tribunals have gone beyond awards of cash damages and issued
    injunctive relief that creates severe conflicts of law. For instance, a recent
    order by a tribunal in the case brought by Chevron against Ecuador under a U.S.-Ecuador BIT ordered the executive branch of that country to violate its
    constitutional separation of powers and somehow halt the enforcement of an
    appellate court ruling. (This case is described below in more detail.) The
    international tribunals that currently rule over Investor-State claims lack
    public accountability, standard judicial ethics rules, and appeals processes.


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