20150817 Outreach day one 1 martingdThe European Commission yesterday announced its plan for the reform of the Investor-State Dispute Settlement Mechanism (ISDS), the clause allowing foreign investors the right to sue governments included in the ongoing TTIP negotiations between the European Union and the United States. [1]

The new Investment Court System would replace the ISDS mechanism in all on-going and future EU investment negotiations.

Friends of the Earth Malta criticises the proposal, which fails to fundamentally reform the flawed system of investor protection, in particular the granting of exclusive privileges to foreign investors over the rest of society, and ignores the fact that investor rights are not needed in an EU-US agreement.

Trade Commissioner Malmström confirmed that the new proposal will not apply to the almost finalised EU-Canada agreement (CETA). This allows US companies with subsidiaries in Canada to sue European member states based on the old model. [2]

Elena Portelli of Friends of the Earth Malta said: “The European Commission’s proposal for an ‘International Court System’ is ISDS under a new name. Despite reforms on the functioning of the system, it reaffirms the granting of extraordinary rights for corporate investors without giving them any obligations that would protect citizens and the environment.”

Portelli continued: “The clause would extend the reach of arbitration cases from the current 10% to 100% of trade between the EU and the US. We would expect to see a steep rise in the amount of these cases, costing taxpayers millions in compensation costs’.

The proposal, which is not the final EU legal text and has yet to be approved by the United States, confirms the lack of commitment by the European Commission to take into account overwhelming public opposition to special investor rights [3].

One should note that the reaction of U.S. Chamber of Commerce Vice President for European Affairs Marjorie Chorlins to Malmström’s announcement is less than favourable:

“While we recognize the EU has a political problem relating to future investment treaties, the U.S. business community cannot in any way endorse today’s EU proposal as a model for the Transatlantic Trade and Investment Partnership (TTIP).  The recent European debate around investment treaties – the obligations governments accept in them and the methods they provide for dispute settlement – is not grounded in the facts, and the distortions in this debate cannot be allowed to trump sound policy. If the EU still regards the TTIP as a serious objective, today’s proposal is deeply flawed.  Tough negotiations lie ahead, and the reforms the United States has undertaken in recent years in its own investment agreements represent a far superior starting point for these important deliberations.”

It comes in a context of overwhelming public opposition to the proposed inclusion of special rights for investors in the on-going EU-US trade talks (TTIP) and in the EU-Canada trade (CETA) and heated political debate [4].

Friends of the Earth Malta as a member of Front Against TTIP (Malta) reiterates its position against the inclusion of any international arbitration courts included in the TTIP agreement, and urges citizens to sign the petition against TTIP at stop-ttip.org. The petition will close on the 6th of October.

Notes to the editor:

[1] http://trade.ec.europa.eu/doclib/press/index.cfm?id=1364

[2] http://www.foeeurope.org/trading-away-democracy-cetas-investor-protection-rules-threaten-public-good-191114

[3] http://www.s2bnetwork.org/isds-statement/

[4] http://www.foeeurope.org/eu-commission-deaf-opposition-investor-privileges-130115

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