Brussels, 22/10/2014 (Agence Europe) - During his investiture speech, Jean-Claude Juncker - the president of the new European Commission who will take up office on 1 November following the European Parliament's green light on Tuesday 22 October - committed to the transatlantic trade and investment partnership (TTIP) excluding any supranational arbitration body in investor-state dispute settlement (ISDS).
“Let me once again state my position clearly, that I had set out on 15 July in front of this House and that you will find in my political guidelines: my Commission will not accept that the jurisdiction of courts in the EU member states be limited by special regimes for investor-to-state disputes. The rule of law and the principle of equality before the law must also apply in this context. The negotiating mandate foresees a number of conditions that have to be respected by such a regime as well as an assessment of its relationship with domestic courts. There is thus no obligation in this regard: the mandate leaves it open and serves as a guide”, Juncker told MEPs on Wednesday morning.
“In the agreement that my Commission will eventually submit to this House for approval there will be nothing that limits for the parties the access to national courts or that will allow secret courts to have the final say in disputes between investors and States. I have asked Frans Timmermans, in his role as First Vice-President in charge of the Rule of Law and the Charter of Fundamental Rights, to advise me on the matter. There will be no investor-to-state dispute clause in TTIP if Frans does not agree with it too. I am confident that - with your support - we can negotiate an ambitious trade agreement with the US along these lines, with full respect of European interests and the rule of law”, Juncker stated.
“No differences in the Commission on ISDS. I look forward to addressing the issue with President Juncker and Vice-President Timmermans. If it is to be included in TTIP, ISDS must indeed be reformed”, said incoming European Commissioner for Trade Cecilia Malmström shortly afterwards.
The debate on the ISDS clause has been raging for months in Europe - so much so that outgoing Commissioner for Trade Karel De Gucht had to put the chapter on investment protection and the ISDS mechanism on hold on the technical level - a chapter that was nevertheless provided for in the negotiating mandate given to the Commission by the Council in June 2013. Faced with the hostility of NGOs and public opinion to the ISDS, the outgoing Commission launched a public consultation on this issue in the spring - the results of which the Commission is currently studying.
The ISDS mechanisms aim to protect investors from unfair treatment from their host country. However, NGOs and unions fear that these mechanisms may allow a multinational, which considers itself aggrieved by a public policy, to attack a State - and thus dissuade the States from regulating on social, environmental and health issues. This file has aroused distrust and hostility at the European Parliament and, among member states, Germany has on several occasions expressed its opposition to including ISDS in TTIP.
During his last press conference in Brussels on 17 October, De Gucht said he believed that the future Juncker Commission was “free to refuse the ISDS mechanism but that it [should] then call on the member states to change the negotiating mandates for all the free trade negotiations under way”, which all provide for ISDS clauses. The latest agreements concluded with Canada and Singapore include such clauses. De Gucht also said that 24 out of the 28 EU member states had already spoken out in support of such mechanisms being included in TTIP, when they attended the informal trade ministers meeting in Rome on 15 October. To a question about what would happen if the EU did not want to include ISDS clauses in its free trade negotiations, De Gucht stated: “my personal point of view is that it would be a disaster for our position in the negotiation”. (EH)