Brussels, 17/09/2015 (Agence Europe) - The European Commission's proposal to create a special court in the future EU-US free trade agreement (TTIP) for settling investment disputes, which would replace the investor-state dispute settlement (ISDS) mechanism in any future trade agreement, received a warm welcome after it was published on Wednesday 16 September.
For France, which had shown a great deal of reservation about including an ISDS mechanism in TTIP, Secretary of State for Trade Matthias Fekl welcomed “the invention at European level of a totally new mechanism that respects democratic choices”. “France has made the lines move in Europe” on this controversial issue (…) “along with Germany”, Fekl added. “By planning the creation of a special investment court, which will have a court of first instance and an appeals court, the Commission has taken measure of the need to break with the old arbitration mechanism. Several proposals will nevertheless still have to be clarified and strengthened”, he said.
In the European Parliament, the main political groups (with the exception of the Greens/EFA Group) welcomed the proposal tabled by European Commissioner for Trade Cecilia Malmström.
“Today we are opening a new chapter in investment protection policy (…) The proposal for an investment court system (…) will be a firewall that will ensure transparency and reliability both for states and investors. It lays the ground for fairness, equitability and trustfulness in investment protection worldwide”, said Daniel Caspary (Germany) on behalf of the EPP Group. “For months we have been asking the Commission to replace the current ISDS mechanism with a new system that has the features of a true public jurisdiction. We've been heard”, hailed Caspary's French colleagues, Tokia Saïfi and Franck Proust.
“There has been a great deal of scaremongering about investor protection in the EU-US trade deal, but there has also been some legitimate concern. The Commission is right to address these concerns in putting forward a blueprint for a modern investor protection system (…) As always with areas of legal complexity, the devil will be in the detail”, said Emma McClarkin (UK) on behalf of the ECR Group. “I have always strongly supported the right of national governments to regulate in the interest of their people, but this must remain in line with the legal commitments and obligations they have entered into. The bottom line is that EU investors must be protected in the United States. The elements agreed in TTIP are likely to form a gold standard for future trade agreements, so it is essential that we work on getting this right”, she said.
For the socialists and democrats (S&D Group), Gianni Pittella (Italy) welcomed the replacement of the ISDS mechanism with a new public and transparent mechanism for resolving disputes - a system that would prevent private interests from undermining public policies, and that would be subject to public law. “The Commission's proposal is the only way forward for the EU's trade policy and the last nail in the coffin for ISDS (…) This new instrument must be introduced in all existing and future EU trade and investment agreements”, said Bernd Lange (Germany), who chairs the European Parliament's international trade committee.
For the liberals and democrats (ALDE Group), the new proposals show that the European Commission is “listening” to the legitimate concerns of the Parliament and European citizens. “We strongly welcome the steps taken today by Liberal Commissioner Cecilia Malmström to propose an alternative to the ISDS system (…) Europe needs an investment protection mechanism which is trusted, independent and transparent”, said ALDE leader Guy Verhofstadt (Belgium). “A trade agreement must not undermine democracy and cannot be a backdoor for companies to change legislation. The EU can play a leading role in reforming the current fragmented and outdated system of investment protection (…) the Commission needs to engage China and Canada to work towards an international court”, said Marietje Schaake (Netherlands).
By contrast, for the Greens/EFA Group, Yannick Jadot (France) criticised “a smokescreen operation”. “Despite a few changes to reduce the huge conflicts of interest prevailing in the current arbitration systems, no response has been brought to the fundamental criticisms. The special investment court/ISDS remains a system that threatens states and taxpayers with very heavy financial sanctions. The ISDS is a tool for putting pressure on regional and local authorities, states or the European institutions to freeze legislation that multinationals don't like. The scandals on endocrine disruptors, tobacco, GMOs or fuels from Canadian tar sands confirm the Commission's collusion with private interests, to the detriment of European citizens' interests”, Jadot said. Similarly, Greenpeace said in a press release: “The Commission continues to back a two-speed justice system - a privileged justice for multinational corporations to protect their private interests, and a basic justice for citizens and small and medium enterprises.” (Emmanuel Hagry)