Brussels, 12/11/2015 (Agence Europe) - On Thursday 12 November, the European Commission announced that it had finalised and officially presented its proposal to the US on a reformed approach to investment protection and a new more transparent system of investor-state dispute settlement (ISDS), as part of the negotiations for a transatlantic trade and investment partnership agreement (TTIP).
After in-depth consultations with the Council and European Parliament on its proposal of 16 September to create a special court of justice to rule on investment-linked disputes in TTIP and to replace the current ISDS mechanism in any future negotiation on investment between the EU and third country or regional bloc (see EUROPE 11390), the Commission has formally sent its finalised proposal to the US side.
This document involves all the key elements of the proposal of 16 September - an arrangement to ensure the right to regulate, the creation of a special court for investment and an appeal court based on clearly defined rules, with qualified judges and transparent procedures.
One of the improvements brought to the 16 September proposal is the inclusion of a clause to allow SMEs to benefit from a quicker procedure and from privileged treatment in comparison with big multinational companies.
“Today marks the end of a long internal process in the EU to develop a modern approach on investment protection and dispute resolution for TTIP and beyond. This is the result of far-reaching consultations and debates with member states, the European Parliament, stakeholders and citizens. This approach will allow the EU to take a global role on the path of reform, to create an international court based on public trust”, said European Commissioner for Trade Cecilia Malmström.
The EU will now be able to resume talks with the US side on investment protection and the resolution of investment-related disputes as part of TTIP. These talks had been put on hold following the launch of a public consultation in the EU on this issue in March 2014.
Alongside this, the Commission will work with other countries on the creation of a permanent international court on investment. Discussions with several international organisations are already underway on this. The long term objective is to replace all the investment dispute settlement mechanisms in the trade and investment agreements between the EU and its member states and third countries with an international investment court. This process would lead to the full replacement of the old ISDS mechanisms with a modern international mechanism, which is effective, transparent and impartial, for the resolution of investment disputes, the Commission states. (Original version in French by Emmanuel Hagry)