Strasbourg, 12/05/2011 (Agence Europe) - While urging the replacement of bilateral investment treaties (BITs) with EU-wide agreements, the European Parliament wants to reduce the European Commission's power to re-examine and withdraw authorisation from member states being able to conclude these bilateral investment treaties.
The current legal framework for bilateral investment treaties (BITs) consists of more than 1,200 BITs between the EU27 and third countries. Since the entry into force of the Lisbon Treaty on 1 December 2009, foreign direct investment from abroad is an exclusive competency of the EU. The Commission now has exclusive rights to carry out negotiations on new investment agreements with third countries. This change involves the gradual replacement of the 1,200 BITs. The question is being tackled in the report by Carl Schlyter (Greens/EFA, Sweden), which was adopted at the Wednesday plenary assembly on 11 May by 345 votes in favour, 246 against, with 14 abstentions.
The report adopted on Wednesday is very close to the version adopted by the international trade committee in mid-April. It is based on the compromise amendments proposed by the EPP, ECR and ALDE groups, which were opposed by the S&D, Greens/EFA and the GUE/NGL. They generally aim to weaken the power of the Commission in both its power to review BITs and in the reasons it can cite to withdraw authorisation from them.
The draft regulation proposed by the Commission is provoking the most controversy at Parliament and at the Council, where the majority of member states have expressed their misgivings. Reviews of BITs would no longer be mandatory, and only happen under stricter circumstances. The European Commission is proposing to make it mandatory for member states to notify it of their BITs. In return, they will allow it to maintain these agreements in force. Following examination of these treaties, the Commission could withdraw this authorisation for BITs that are not compatible with Community law and which would duplicate specific agreements concluded at a European level with the same country or in the case where the BIT is not compatible with EU investment policy.
The amendments voted for by the Parliament aim to protect existing agreements and limit the European Commission's power to replace BITs with EU level agreements. Reviews of BITs would no longer be mandatory, and only happen under stricter circumstances. The deadline by which the Commission needs to inform Parliament of the results of the review process was also extended from five to ten years after the entry into force of the regulation. The report limits the reasons for which the Commission can withdraw authorisation from BITs. At the same time, MEPs' amendments would allow for member states to amend existing BITs or to conclude new ones, provided that they notify the Commission beforehand, and as long as a simple majority of member states in the Council doesn't prefer that an EU-level agreement be negotiated, instead.
The S&D and Greens/EFA immediately criticised the results of Wednesday's vote, which they believe authorises investment agreements that conflict with certain EU principles. In a press release, Carl Schlyter deplored the fact that “to suggest that the BITs do not have to comply with EU standards, for example in the social arena, consumer protection or with environmental rules, is unacceptable. This vote will also have an impact on legal security because the only option for protesting against these agreements (if they are considered incompatible with EU rules) would now be to go to the European Court of Justice. Protection should be based on fair and equal rules between national and foreign companies but at the same time it should not be an obstacle to new rules on the environment and health protection. Unfortunately, the European Commission will now only be able to question an agreement if it is considered as an obstacle to any future European agreement and not if it is considered as an obstacle to the sustainable transformation of the economy.” The Swedish MEP also criticised the rejection by the EPP, ECR and ALDE coalition on this dossier and for objecting to his proposals on increased transparency in cases involving the arbitration of investment treaties. He insisted that there would be no provision to guarantee access to essential documents in conflicts related to investment agreements. He said that this reflected an obsolete vision of diplomacy rather than a modern trade policy. On the question of investment, Kader Arif (Socialist) said that they were defending an approach that was both ethical and responsible and that if they wanted to give companies the necessary tools to make investments that were both high quality and safe in foreign countries, it was essential that the EU promoted a more responsible European investment ethos abroad. The French MEP said that for this reason they had fought for the examination of previous agreements to be done within a Community logic and that “the law had defended the interests of private investors, underpinned by the member states. This national approach is to be regretted and we see it as being against the general interest today.”
Unless member states fully agree to the version amended in the first reading, discussions with the Council could soon begin in view of a second reading of the text. (E.H./transl.fl)