Tom Ferris is a Consultant Economist specialising in Better Regulation. He was formerly the Department of Transport’s Senior Economist.
WILL A NEW INVESTOR COURT SYSTEM BE INTRODUCED AS PART OF TTIP TALKS BETWEEN THE EU AND USA?
A Stakeholder Forum took place last week (21 October 2015) in Miami, Florida, as part of the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the EU and the USA. The forum was just one dimension of the eleventh negotiating round of TTIP. Registered stakeholders had the opportunity to deliver presentations, share briefing materials, and engage with US and EU negotiators. In addition, the Chief U.S. Negotiator Dan Mullaney and Chief EU Negotiator Ignacio Garcia-Bercero briefed stakeholders and responded to questions on the status of the TTIP negotiations. Readers can pick-up on elements of TTIP that might affect Ireland in earlier PAI blogs – one from last April and the second from early October.
THE ISDS: A MATTER OF CONCERN
Over thirty individuals and organisations were listed to speak at the Stakeholder Forum today. One issue of concern that raised its head was the ‘investor-state-dispute-settlement’ (ISDS) system. This is an instrument of public international law that grants an investor the right to use dispute settlement proceedings against a foreign government.Opponents of TTIP have criticized the ISDS procedure, currently included in many free trade and investment pacts, because it allows private organisations to sue against government actions that damage their investments. They fear it will undermine the right of governments to regulate.
In response to concerns from many different organisations, the EU has now directly addressed ISDS. Specifically, an Investment Court System has been proposed. The proposal builds on the input received from the European Parliament, Member States, national parliaments and stakeholders through the public consultation already held on ISDS. It is intended to ensure that all actors can have full trust in the system. Built around the same key elements as domestic and international courts, it enshrines governments’ right to regulate and ensures transparency and accountability. The EU’s First Vice-President Frans Timmermans said:
“With our proposals for a new Investment Court System, we are breaking new ground. The new Investment Court System will be composed of fully qualified judges, proceedings will be transparent, and cases will be decided on the basis of clear rules. In addition, the Court will be subject to review by a new Appeal Tribunal. With this new system, we protect the governments’ right to regulate, and ensure that investment disputes will be adjudicated in full accordance with the rule of law.” 1
The proposal for an Investment Court System is only the start of a process. The Commission will now have to have discussions with the Council and the European Parliament. After the text of the proposal has been discussed, it will then be presented as an EU text proposal in the EU-US trade talks and will be used in other ongoing and future negotiations. The same will be true for other policy issues – proposals will have to be made, internal discussions will follow within the EU, and then negotiations will have to follow as part of the EU-US trade talks. Even if agreement is achieved at those talks, there still needs to be endorsement at EU Member State level. Depending on the policy areas covered in the final TTIP agreement, the twenty-eight national parliaments of the EU’s Member States might also have to give their approval. So there is yet still a long way to go, not just for a new Investment Court System, but also other policy issues of concern.