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12 March 2014

ISDS one of many risks that could sink TTIP deal

Business and negotiator support for ISDS is out of step with the public and their representatives.

Simon McKeagney, Editor

“Increasingly vocal opposition” to TTIP should be a reason to drop “one of its most controversial provisions” reported the Financial Times on Monday in relation to the inclusion of the Investor State Dispute Mechanism (ISDS) in TTIP. Growing concerns from all corners of the political spectrum as to the viability of a deal containing such a clause are being played out across the media, as negotiators meet for the 4th round of talks in Brussels this week.

According to a report cited by the FT, business groups need to "prioritise what they need” and not what they want, or risk loosing the deal altogether. The claim comes from Daniel Ikenson, director of the trade programme at the conservative Cato Institute, whose piece ‘A Compromise to Advance the Trade Agenda: Purge Negotiations of Investor-State Dispute Settlement’ suggests that:

  “Purging both the TPP and the TTIP of ISDS makes sense economically and politically, would assuage legitimate concerns about those negotiations, splinter the opposition to liberalization, and pave the way for freer trade.”

Although various misaligned stakeholders are in agreement on the removal of ISDS, that is not to say that doing so would eliminate the host of other concerns surrounding the deal, as regulatory convergence still poses major risks for standards in the US and Europe. However, it is a start.

Critics cautiously welcomed the Commission’s decision to partly suspend the talks to hold a 3-month public consultation on ISDS in January. Yannick Jadot, Green trade spokesperson said the announcement was “an important development in the ongoing battle against the controversial EU-US trade negotiations. However, it is only a first step.”

While the media storm rages over ISDS- it will not even be discussed in negotiations this week, with investor-related issues proving too difficult a bridge to cross at this time. Yet, EU and US negotiators have consistently maintained their support for the clause, as have business, with big corporations and law firms said to benefit hugely from its inclusion, politically and financially. On a member state level, however, cracks are showing.

"France does not agree with the inclusion of such a mechanism," said Nicole Bricq, French Minister for Foreign Trade on Monday according to Les Echos. "If such a mechanism should be included in the agreement, the Commission must obtain a unanimous vote.”

In the UK, the FT reports that members of parliament have raised their concerns, with one government backbencher, Zac Goldsmith asking “why do we need these tribunals for a country where the rule of law is adhered to, more or less across the board?”

Germany, who has previously insisted on the inclusion of ISDS clauses in their own bilateral agreements in the past, received a taste of its own medicine during the Vattenfall case, now owing the Swedish firm over a billion euro for deciding to phase out nuclear power. These type of cases could become standard occurrences on an unprecedented scale under TTIP, which should worry any government in Europe whose finances are already spread thin.

The role the European Council will play in finalising or scuppering DG Trade’s goals on ISDS and other business-friendly measures will increasingly become apparent as member states take stronger positions on the finer details and analyse the risks. But just like civil society organisations, and the general public, the Council remains shut out of negotiations.

With neither citizens or their representatives at the helm for these talks, ISDS will remain firmly on the table. And with a storm brewing, there’s no telling if throwing it overboard will ultimately save it.

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