European Parliament Trade Committee Tries To Defuse TTIP Controversy But Outcome Remains Uncertain

European Commission negotiators should back away from a controversial provision in the Transatlantic Trade and Investment Partnership (TTIP) deal that would allow companies to sue governments in arbitration courts over claimed unequal treatment, the European Parliament International Trade Committee (INTA) said on 28 May. MEPs called instead for publicly appointed, independent judges, public hearings and an appellate mechanism that respects the jurisdiction of EU and national courts, the committee said.

A committee press release is available here.

But despite INTA’s compromise attempt, MEPs could eventually reject investor-state dispute settlement (ISDS) provisions and TTIP altogether, a trade lawyer said.

INTA’s stance on ISDS differed from that of Parliament’s Legal Affairs (JURI) Committee. Its opinion [pdf] observed that “ensuring that foreign investors are treated in a non-discriminatory fashion and have a fair opportunity to seek and achieve redress of grievances can be achieved without the inclusion in the TTIP of investment protection standards or an ISDS mechanisms.”

JURI called on the EC to oppose inclusion of ISDS in the trade agreement on the ground that other investment protection options are available, such as domestic remedies.

European Parliament Could Kill TTIP

The outcome of the plenary vote – and of TTIP itself – is uncertain, Squire Patton Boggs international trade attorney Aline Doussin said in a 29 May interview. There’s nothing new about the ISDS mechanism – it has always been part of bilateral investment agreements – and opposition to having it in TTIP is coming not from international trade experts or MEPs with knowledge of that area, but from nongovernmental organisations, activists and others, she said.

Their concerns are about transparency: They worry that private investor lawsuits against governments which could affect citizens will be decided by arbitrators, chosen by the parties, who work behind closed doors. The idea of privatised justice outside of courts scares some people, she said. INTA’s compromise seeks an ISDS mechanism that leads to greater transparency, she said.

INTA’s opinion is non-binding, and other committees that are not as keyed in on international trade issues might introduce amendments in plenary, said Doussin. Not only could the INTA compromise fail, but Parliament, which has a say in the final TTIP treaty, could ultimately reject it, she said. That’s why the EC is being more open about what is being negotiated, Doussin added.

“Deplorably, the European Parliament took a very ambiguous stance on the infamous” ISDS system, said European Consumer Organisation Director General Monique Goyens. “We have yet to see any facts justifying its inclusion” in the trade deal. Goyens urged MEPs voting in plenary to demand that the ISDS provisions be excluded.

INTA’s position “does not reflect citizens’ concerns,” or JURI advice, said European Digital Rights Executive Director Joe McNamee. Several other committees adopted opinions on TTIP that were “far more balanced and critical,” he said. “This means that the balance of views in the Parliament are not reflected” in the INTA vote.

Strong IP Protections Sought

The amended text of INTA’s opinion, which is not yet available, will be voted on in a 10 June plenary session. It also asked the EC ensure that TTIP includes an “ambitious” intellectual property rights chapter with strong protection for “precisely and clearly defined areas of IPR, including enhanced protection and recognition” of European geographical indications, but no provisions for criminal enforcement penalties, which Parliament previously rejected.

The draft, which INTA members approved 28-13, also said IPR provisions should reflect “a fair and efficient level of protection such as laid out in the EU’s and the US’s free trade agreement provisions in this area, while continuing to confirm the existing flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights [TRIPS] … notably in the area of public health.”

Both committees urged the inclusion of protections for European geographical indications (GIs), a sore spot with the United States, which uses a trademark system to protect such products derived from places and with particular characteristics.

JURI, however, said that since neither EU countries nor the EU have decided yet whether to comprehensively harmonise copyright, trademark or patent rights, the EC “ought not to negotiate on these interests” in the TTIP. It cautioned against trying to introduce language on substantive patent law, while the EU and US are engaged in global multilateral patent harmonisation talks. JURI members, too, urged the EC to ensure that TTIP negotiations address the need for greater recognition of and continuing protection for those products whose origin is of high importance.

Here again, INTA basically ignored JURI’s opinion, EDRi said.