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News reports suggest ISDS will not be in TTIP


Juncker  Cecilia Malmstrom

Photo: Juncker and Malmstrom

There is exciting news out of Europe with respect to the investor-state dispute settlement (ISDS) provision in the United States-European Union Transatlantic Trade and Investment Partnership (TTIP) that is likely to have profound consequences for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

The German newspaper Der Tagesspiegel reports that the incoming European Commission trade commissioner Cecilia Malmstrom is opposed to investor-state and that a spokesperson for the incoming European Commision president Jean-Claude Juncker confirms there will be no ISDS in TTIP.

The newspaper reports (in German), “A written response to the European Parliament on the nomination of Trade Commissioner Malmstrom now confirms earlier statements by Juncker that ‘no investor-state arbitration will be part of the agreement’ and ‘no restriction on the jurisdiction of courts of the Member States will be accepted’. In the letter, [Malmstrom] says, ‘I support the approach of the elected President and I will put in this sense, deny the ongoing free trade negotiations, where the topic is on the table.'”

A British Trades Union Congress (TUC) blog frames it as, “Malmstrom suggested on 27 September that she wanted to exclude ISDS from TTIP. …In [her written response to pre-ratification questions from the European Parliament] Ms. Malmstrom quotes … Juncker as saying that no limitation of the jurisdiction of courts in EU member states would be accepted in the new transatlantic trade agreement. ‘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 [Juncker] and will work in this sense in the negotiations.'”

This news became public as outgoing European Commission president Jose Manuel Barroso – whose terms ends in November – was at the Canada-EU summit in Ottawa with Canadian prime minister Stephen Harper to officially mark the conclusion of CETA negotiations.

But Friday’s news reinforces the reality that CETA is far from settled and may in fact be in deep trouble.

Given U.S. corporations with offices in Toronto, Calgary and Vancouver could as easily use the investor-state provision in CETA to sue European governments over public interest legislation that impact their future profits, it’s inconceivable that ISDS would be removed from TTIP but not CETA.

As Green MEP Sven Giegold is quoted in the Der Tagesspiegel article saying, “The consequence to TTIP from the announcement must now roll up to CETA”.

The position as of Friday, as expressed by a spokesperson for Canadian trade minister Ed Fast, is that, “Investment protections have long been a core element of trade policy in Canada and Europe…” and that the negotiations are now closed.

Stay tuned!

Postscript: There are now various tweets from European allies that indicate a different position on the issue by Malmstrom. This morning she is at a confirmation hearing at the European Parliament for the position of trade commissioner. MEP Ska Keller tweets, “to make it clear: @MalmstromEU does not want to kick out #ISDS of #CETA nor of #TTIP negotiations.” As well, (the right-wing) Cato Institute trade policy analyst Simon Lester has tweeted, “@MalmstromEU says we can’t re-open #CETA.” Der Tagesspiegel now reports that Malmstrom is opposed to opening CETA to remove the investor-state provision because it would put the entire deal at risk. Furthermore, signalling a worsening position, War on Want executive director John Hilary has tweeted, “Now @MalmstromEU in real trouble, arguing that #CETA might not be a mixed competence agreement with EU member states. Crazy!”