29 September 2014

Malmström embroiled in fresh ISDS controversy as EP hearing commences

Tough questions ahead for future trade commissioner after weekend of flip-flopping

Simon McKeagney, Editor

Update 11.25am: Reuters is now reporting that the Juncker quote in question (below) was incorrect. "The source blamed the mistake on an unidentified official who had inserted words that Juncker had not actually uttered." It relates specifically to the line '"..this clearly means that no investor-State dispute settlement mechanism will be part of that agreement."' The plot thickens...


Commissioner-elect Cecilia Malmström has been the centre of the latest controversy over the investor-state dispute settlement by seemingly calling for its removal, only to back-track on her statement within hours.

In a written response to an MEP questionnaire sent on Friday evening (Sept 26) Malmström quoted Juncker’s own view on TTIP, saying: 

‘… “No limitation of the jurisdiction of courts in the EU Member States will be accepted in this context; this clearly means that no investor-State dispute settlement mechanism will be part of that agreement." I fully support this approach of the President-elect and will work in this sense in the negotiations, which are ongoing and where this issue is on the table. It will have to be addressed.’

MEPs who had opposed ISDS welcomed the news immediately. David Martin of the S&D group released a press release saying "We have been clear and we have been insistent: there is no place for ISDS in TTIP. I'm glad the Commissioner-designate agrees."

But by 10pm, the Twitterstorm surrounding the announcement led to an intervention from Malmström herself, who replied to the blogger Jon Worth that the answer in question was “simply the wrong one”. 

A second draft of her answers was sent to MEPs on Sunday, according to the German news site Tagesschau a day before her hearing at the European Parliament, with the sentence in question, missing.

The redraft came as a surprise to number of MEPs, with Green MEP Ska Keller said: ”This is an absolutely unusual event that the answers to these questionnaires would be changed afterwards. This will certainly be addressed in the hearing. A change of position on this issue is urgently needed."

Malmström’s hearing will take place in the Parliament from 2.30pm today, and the weekend’s events should intensify the scrutiny surrounding her position. As trade commissioner she will head up the TTIP talks, which continue in Washington this week, following on from Belgium's conflict-prone Karel De Gucht. ISDS has remained the key point of contention surrounding the TTIP and CETA negotiations for a number of groups in the Parliament, as well as members of the Council. Germany refused to allow CETA to be initialled on Friday at the EU-Canada summit, citing issues with ISDS provisions. 

Malmström's 'slip of the tongue' comes as a rethink appears to be taking place in Brussels on the scope and future of negotiations. Earlier this month the Italian presidency announced the possibility of concluding an "interim agreement", much to the frustration of the American ambassador. Although her response on ISDS was re-issued, there is a suggestion from some sources that she intends on maintaining this "no-ISDS" stance. This afternoon's hearing is likely to give way to a robust debate on these matters. Whether Malmström's response represents a change of attitude at the highest levels or just a mere last minute gaffe before the hearing remains to be seen.

We'll be live tweeting from the hearing this afternoon. Follow @TTIPbeware for updates. 

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