EU proposes reform of trade dispute provisions

| September 24, 2015

The EU Commission has gone some way to assuage public concerns over the inclusion in the proposed Transatlantic Trade and Investment Partnership (TTIP) of investor-state dispute settlement (ISDS) provisions.

Initially, the TTIP was the subject of negotiations between the EU and US to which the general public was not privy, and even now aspects of the process are highly secretive.

Campaigners fear that the ISDS provisions will allow multinational firms, including tobacco companies, to sue European governments in secretive tribunals ruled upon by corporate lawyers.

But according to a story by Erik Tate in The Parliament magazine, on Monday the deputy director general of DG [Directorate General] Trade, Mauro Petriccione, presented the EU Commission’s new draft text on ISDS to the committee on international trade (INTA).

Petriccione was said to have highlighted this move as an unprecedented step by the Commission, since he was not presenting a formal text but a Commission draft. There would be discussions in the Council before it became the text to be used in negotiations with the US.

This was a very special case and an issue of extraordinary importance which had prompted an extraordinary debate. As a result, the Commission had taken the unprecedented step of making the draft public. The Commission had felt that it was inappropriate for it to wait any longer.

Petriccione had noted that there had already been a lot of discussion on this subject, and said the text would attempt to deliver on the EU Commissioner for Trade Cecilia Malmström’s commitment to use the TTIP as an opportunity for in-depth reform of ISDS.

What had become clear in this process was that there was widespread distrust by citizens of commercial arbitration. The European Parliament clearly interpreted this as a move towards a more jurisdictional approach.

Petriccione said that a concept paper had been discussed in the INTA committee in May, and that the new text followed the structure and objectives of that paper. It contained two fundamental elements:

1) Investment Protection. It continued the work of the Commission to ensure that investment protection standards were clear, well-defined, operational, and could be decided upon in a court of law. Most importantly, the standards would not prevent a government from regulating in the public interest.

2) Public Justice. It represented a move from a system of private justice to one of public justice, in which decisions were taken by public judges in order to restore confidence in their impartiality, judgement and competence to do the job properly.

These were the exact requirements of the European Parliament’s TTIP resolution. The resolution defined protection in a precise legal manner, explicitly mentioned the right to regulate and proposed a new system of resolution which was public, transparent, and included the possibility of appeal to correct any mistakes of law.

The main element, which was new to the proposal, was the article on the right to regulate, which ensured that the right to regulate for public policies was fully preserved.

The provision also clarified that investment protection provisions did not prevent governments from changing the legal framework – known as the non-stabilization clause – even if this had a negative impact on investment expectations.

The full story is at: https://www.theparliamentmagazine.eu/articles/eu-monitoring/ttip-commission-presents-new-isds-proposal.

Category: Breaking News

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