The Otium Post

The Otium Post


EU Parliament rejects crucial part of TTIP (ISDS)

EU Parliament rejects crucial part of TTIP

By Staff Writers, teleSUR
Friday, May 8, 2015

People dressed in costumes take part in a demonstration against the TTIP in Munich April 18, 2015. | Photo: Reuters

Members of the European Parliament warned Thursday they will not support the free trade agreement currently being negotiated with the United States if an Investor-State Dispute Settlement (ISDS) mechanism is included, despite attempts by the European Commission, which is strongly in favor of the deal, to soften it through a few modifications.

The ISDS system would allow multinational corporations to sue governments in private trade tribunals whenever national laws threaten to reduce their profits, for instance if laws blocks the privatization of health services. This arbitration process has evoked the most criticisms against the a Transatlantic Trade and Investment Partnership (TTIP) deal from the part of civil society groups, unions and lawmakers.

In a bid to change the Members of the European Parliament opinion on ISDS, European Trade Commissioner Cecilia Malmström presented a new version of the provision that she had negotiated with the United States. She admitted that "in the past, agreements have been drafted more with the protection of investment in mind than the right of governments to regulate - this will no longer be the case."

Among other modifications introduced, Malmström proposed that the arbitrators of the court would be selected from a list previously agreed on between the EU and the United States as a temporary solution before the implementation of “a permanent international investment court," which would include an an appeal mechanism.

However, the EU lawmakers in Parliament remained skeptical of the proposition.

Even though the commissioner argued that these were "not cosmetic changes,” French parliamentarian Yannick Jadot (Green Group) accused the commission of "trying to put lipstick on the ISDS pig" and "trying to test the waters of what form of ISDS might be acceptable to Socialist (Members of European Parliament)."

He added that the commission needed “to consign ISDS and any derivatives of this approach to the history of EU trade policy and start by excluding it from the EU-U.S. TTIP negotiations," something Malmström discarded during her presentation.

Earlier in the week, senior U.N. official Alfred de Zayas told the Guardian that the ISDS provision seriously threatened human rights and was a justified reason to suspend the trade talks.

“There have been more than 600 such cases [of arbitration] and most of them have been decided in favour of the corporations,” said the U.N. special rapporteur on promotion of a democratic and equitable international order. “Why? Because the arbitrators are highly paid corporate lawyers, today working for the corporation, tomorrow as advocates, day after tomorrow as lobbyist, the day after that as arbitrators. These are classical situations of conflict of interest and lack of independence.”

One month before, de Zayas issued a statement demanding unions, health experts and environmentalists to be included in the TTIP talks.

Although the U.N. does not have any formal leverage within the negotiations, the U.N. official hoped he could convince the EU parliamentarians before their vote in August with a report he is preparing about the mechanisms companies find to bypass national laws. 

The EU parliament's agreement is is mandatory to finalize the TTIP deal, which the commission hopes will occur by the end of the year. However, the ISDS issue may likely delay the negotiations beyond then.




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