Matthias Fekl, France’s Secretary of State for Foreign Trade, has made it clear that France will not support the inclusion of the Investor State Dispute Settlement mechanism (ISDS) in a potential TTIP agreement. The ISDS is a point of heated debate between the EU and the United States. EurActiv France reports.
Europe’s fears over the Transatlantic Trade and Investment Partnership (TTIP) are not abating, while America is beginning to show signs of impatience. Europe and the United States have reached a standoff in the TTIP negotiations, over the question of the Investor State Dispute Settlement.
This mechanism could give companies the opportunity to take legal action against a state whose legislation has a negative impact on their economic activity.
“France did not want the ISDS to be included in the negotiation mandate,” Matthias Fekl told the French Senate. “We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,” he added.
German opposition to the ISDS mechanism is also very strong. The German Minister for Economic Affairs has often expressed his support for the trade deal with the United States, on the condition that it does not include the ISDS.
The disagreement over the ISDS has caused negotiations to stall. “The year 2014 did not see any great advances in the transatlantic agreement,” Fekl said during a speech to the French Senate.
In Brussels, the EU’s position on the Investor State Dispute Settlement mechanism became clear after the appointment of the new team of EU Commissioners.
In his speech to the European Parliament on 22 October, the new Commission President Jean-Claude Juncker said he would not accept any external limitations being placed on the member states’ ability to settle their own industrial disputes.
Negotiators from the United States are trying to move the talks forward, despite reluctance from the European Union.
During a visit to the European Parliament’s October plenary session in Strasbourg, Anthony Luzzatto Gardner, from the United States’ mission to the EU, insisted that the ISDS was an important clause in the TTIP negotiations.
“Our message to the people of Europe is not to remove it from the table, but to conclude the discussion process and to improve it,” he said.
A bad signal
“Removing the ISDS from the negotiations would give off a very bad signal. It would clear the way for the removal of other chapters of the negotiations,” he added.
The American negotiators are beginning to show frustration at the demonisation of these arbitration tribunals. “Investor State Dispute Settlements have never been, and will not be, a way for businesses to challenge legislation they do not agree with,” an American negotiator said in Paris.
The next cycle of negotiations is due to take place in December.
National parliaments remain vigilant
The European Commission’s mandate for the TTIP negotiations was set by the member states, and the American negotiators will have to satisfy not only the Commission, but also the national parliaments of the EU if an agreement is to be reached.
In France, Matthias Fekl reminded the Senate that the Transatlantic Trade and Investment Partnership was “a mixed agreement”. “It is the parliamentarians who will have the last word when the agreement is finalised,” he said, adding “I don’t think will be any time soon”.
Commission mulls TTIP minus investor arbitration
The European Commission may have changed its view over including investment arbitration in the EU-US trade agreement TTIP, a move that would be a wish-come-true for Economic Affairs Minister Sigmar Gabriel and others, who fear the measure could lead to companies influencing government policy. EurActiv Germany reports.
The European Commission is considering omitting much-disputed plans for an arbitration procedure, a safety net for investors, from the Transatlantic Trade and Investment Partnership (TTIP) currently under negotiation. An internal document from DG Trade addressed to EU Trade Commissioner Cecilia Malmström, revealed plans to strike the passage from the negotiating mandate.
If this effort succeeds without any significant adverse effects, “it would be the strongest measure to confront the anti-TTIP campaign, to start a new kind of communication and to show that the Commission will respond to the public,” Handelsblatt wrote, citing the document. Regulation of the Investor State Dispute Settlement (ISDS) “is one of the most important decisions to be made in the near future”, the paper said.
German Economic Affairs Minister Sigmar Gabriel, in particular, has repeatedly expressed his support for concluding an agreement with the United States without controversial investor protection, via an extrajudicial international court of arbitration.
TTIP was also discussed during Gabriel’s recent visit to the United States. After a meeting with US Vice President Joe Biden, the German politician explained, “I have indicated that, in our view, there is no need for any special protection for investors.”
“We agreed that we must create more transparency in negotiations”, Gabriel continued. TTIP is not only about free trade in a strict sense, but also about the EU and the US setting common standards for global trade. The Economic Affairs Minister said he fundamentally supports such an agreement between the two trade giants.
“TTIP is a gigantic geostrategic opportunity,” Gabriel commented.
The planned arbitration procedure is highly controversially among the public. It would be designed to provide protection to commercial investors, but bypass a national court. Opponents of the measure are concerned over a lack of transparency in an arbitration procedure and fear that private companies, threatened with high damage claims, could indirectly influence government policy.
Commission swamped by 150,000 replies to TTIP consultation
About 150,000 people have responded to the European Commission’s online consultation on the controversial investor-state dispute settlement (ISDS) clause in the Transatlantic Trade and Investment Partnership (TTIP).
In January, the EU executive stopped trade negotiations with the US on the ISDS mechanism. It launched the online consultation in March after widespread criticism of the clause, which will allow EU and US based corporations to directly sue governments at international tribunals.
The online consultation sparked “very substantial interest”, the Commission said. More than 99% of the 149,399 replies came from individuals, with a particularly large number submitted in collective actions by civil society organisations.
The Commission said it would analyse the replies before it explained the next steps it would take. That is unlikely to happen before November, it added.
Most replies were from the United Kingdom (52,008), followed by Austria (33,753), Germany (32,513), France (9,791), Belgium (9,397), the Netherlands (4,906) and Spain (2,537).
The recent public consultation into the review of EU copyright rules, which closed in March this year, only had about 9,500 replies. More than 11,000 messages to a dedicated email address were also recorded. The Commission said it had “generated broad interest”. In a press release on Friday (24 July), the executive said it was, “one of the highest response rates ever for a Commission consultation”.
A 2013 public consultation, lasting three months, into whether the EU should regulate fracking – the extraction of shale gas – generated 22,000 replies, a figure dwarfed by the TTIP response.
Preliminary findings showed 569 organisations gave their opinion on the investment protection measures. 180 were non-government organisations (NGOs), 22 umbrella NGOs, 42 were EU trade union organisations, and 11 were government institutions and regulators. 66 trade associations representing EU businesses, 66 companies, 42 law firms, 15 consultancy firms also answered.
738 respondents, 0.5% of the total replies from businesses and individuals , admitted they had made an investment in the USA.
More than half of the respondents (79,444) refused to allow their contribution to be made public on the Commission’s website. But 91.39% of the organisations and 39.37% of individuals agreeing to the publication of their reply, also agreed to their name being published with the contribution.
The preliminary findings were released last night by the Commission. It follows last week’s sixth round of negotiations over the landmark free trade agreement in Brussels, which were greeted with protests.
— EU TTIP Team (@EU_TTIP_team) July 23, 2014
The consultation was built around twelve issues, including the scope of the investment protection provisions, transparency in ISDS, multiple claims and relationship to domestic courts, ensuring consistency of rulings and the appeal mechanism, and reducing the risk of frivolous cases.
Unions, environmental groups and MEPs, including Bernd Lange, the German Socialist Chairman of the European Parliament’s trade committee, have called for ISDS to be dropped from TTIP. Former Spitzenkandidat Ska Keller has called for the talks to be dropped altogether (here).
They argue that ISDS could be used by multinational corporations to bypass national courts and whittle away EU standards and regulations across a range of policies from the environment to food safety to social protection. The talks have also been dogged by accusations of a lack of transparency.
Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
Since then, a new European Parliament has been formed which is markedly more Eurosceptic than the previous one and more likely to oppose free trade.
If successful, TTIP would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment. The EU-US trade relationship is already the biggest in the world. Traded goods and services are worth €2 billion.
TTIP would be the biggest bilateral trade deal ever negotiated, resulting in millions of euros of savings for companies and creating hundreds of thousands of jobs. It is claimed that average European households would gain an extra €545 annually, and that Europe’s economy would be boosted by around 0.5% of GDP, if such a deal was fully implemented.
Brussels and Washington have set the ambitious goal of completing negotiations by the end of 2014.