EU Launches Consultation On Investor-State Dispute Mechanism In TTIP

European Union Trade Commissioner Karel de Gucht today announced a three-month public consultation on investor-state dispute settlement (ISDS) mechanisms in the Transatlantic Trade and Investment Partnership (TTIP), between the EU and United States.

The commissioner was reacting to what he called “genuine concerns about this part of the EU-US deal,” and he acknowledged that in practice earlier ISDS mechanisms had been “allowing companies to exploit loopholes where the legal text has been vague.”

The Commission will publish a consultation paper in March explaining the issues and proposals for how the controversial ISDS might be improved.

Improvements advertised by the Commission so far include explicit references in the TTIP ISDS chapter “to states’ right to regulate in the public’s interest. It would also see new and improved rules, including a code of conduct, to ensure arbitrators are chosen fairly and act impartially, and to open up their proceedings to the public”, the press release reads.

“Governments must always be free to regulate so they can protect people and the environment,” said de Gucht. “But they must also find the right balance and treat investors fairly, so they can attract investment. International investment agreements like TTIP should ensure they do both.”

The spokesperson for de Gucht, John Clancy, told Intellectual Property Watch following the release that there would be a “pause or ‘time out’” on the investment chapter which included the section on ISDS allowing for the consultation and subsequent analysis of it. TTIP negotiations on all other issues would continue.

Representatives from NGOs welcomed the announcement. “Yes, we see this as a result of considerable public pressure from civil society and some politicians,” said Alessa Hartmann, coordinator of the NGO alliance “TTIPunfairHandelbar.”

But the NGO representatives do harbour no illusions about the meaning of the move. It was no more than a first stage victory in the fight about the TTIP. Hartmann re-iterated the request for complete access to trade negotiation documents.

In February, De Gucht and US Trade Representative Michal Froman are expected to join for what has so far been said would be the mid-term review of the highly complex TTIP negotiations.