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

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.