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BackAddressing the Trade Committee of the European Parliament, the EU Commissioner for Trade, Cecilia Malmström made it clear that she continues to regard the controversial international Investor-state dispute settlement (ISDS) in the Free Trade Agreement with the USA (Transatlantic Trade and Investment Partnership TTIP) as indispensable. However, some adjustments would be necessary. In particular Social Democrat, Left and Green MEPs continued to voice their opposition against ISDS.
At the beginning, the Commissioner mentioned the Consultation on ISDS, which – also thanks to the No 2 ISDS campaign by ÖGB and AK – had shown that Europeans are sceptical towards ad hoc courts. Malmström admitted at least some problems with the current concept of courts of arbitration. The appointment of arbitrators had to be improved, the right of regulation by the elected representatives of the people had to be strengthened and the relationship between national system and ISDS had to be clarified. An option for appealing (which is not yet provided for) should also be considered. The Commissioner told the opponents of ISDS that courts of arbitration were necessary, even so the United States justice system would be absolutely trustworthy. TTIP would not apply before American courts and there would be no legal discrimination protection for foreign investors.
Bernd Lange of the S&D also did not generally question the necessity of investor protection. However, investor-state dispute settlement procedures between the USA and the EU were not required; in fact, they would only cause problems. Instead, he argued the case for creating an international court of arbitration within the WTO, in which permanent judges would adjudicate. Malmström pointed out that the Commission would currently work on such a project, however, that its realisation would be more of a mid-term goal.
The remaining S&D MEPs also voiced their opposition against ISDS. The courts would weaken democracy and undermine the functioning legal systems on both sides of the Atlantic. In spite of this, MEPs adopted a positive approach concerning Malmström’s comments, which they considered a signal for dialogue.
EPP members shared Malmström’s position and showed little or no understanding for the harsh criticism on ISDS. Above all, such a system was a chance for SMEs; nevertheless, in the past it had been countries, which had won most cases. Viviane Reding expressed particular support for a court of arbitration within TTIP, which could serve as a preliminary stage for an international court of arbitration, which requires long-term planning.
Left (GUE/NGL) and Green MEPs denied that ISDS was necessary as it was an established fact that it did not promote or encourage investments. Instead of only always talking of investors’ rights, one had also to take their duties, for example in view of the environment, into account. However, there were favourable comments with regard to an international court of arbitration, which is binding under international law
Further information:
ISDS Contribution to the Consultation
AK Position Paper
Impact Assessment of the Transatlantic Trade and Investment Partnership between the USA and the EU
Bernd Lange of the S&D also did not generally question the necessity of investor protection. However, investor-state dispute settlement procedures between the USA and the EU were not required; in fact, they would only cause problems. Instead, he argued the case for creating an international court of arbitration within the WTO, in which permanent judges would adjudicate. Malmström pointed out that the Commission would currently work on such a project, however, that its realisation would be more of a mid-term goal.
The remaining S&D MEPs also voiced their opposition against ISDS. The courts would weaken democracy and undermine the functioning legal systems on both sides of the Atlantic. In spite of this, MEPs adopted a positive approach concerning Malmström’s comments, which they considered a signal for dialogue.
EPP members shared Malmström’s position and showed little or no understanding for the harsh criticism on ISDS. Above all, such a system was a chance for SMEs; nevertheless, in the past it had been countries, which had won most cases. Viviane Reding expressed particular support for a court of arbitration within TTIP, which could serve as a preliminary stage for an international court of arbitration, which requires long-term planning.
Left (GUE/NGL) and Green MEPs denied that ISDS was necessary as it was an established fact that it did not promote or encourage investments. Instead of only always talking of investors’ rights, one had also to take their duties, for example in view of the environment, into account. However, there were favourable comments with regard to an international court of arbitration, which is binding under international law
Further information:
ISDS Contribution to the Consultation
AK Position Paper
Impact Assessment of the Transatlantic Trade and Investment Partnership between the USA and the EU