Parliament round-up: MEPs divided over commission's ISDS report

The EU's public consultation on TTIP has revealed almost unanimous public opposition to the trade deal.

By Jon Benton

Jon Benton is Political Engagement Manager at The Parliament Magazine

14 Jan 2015

The European commission has released the results of its public consultation, the largest in EU history, on the inclusion of investor-to-state dispute settlement (ISDS) in the transatlantic trade and investment partnership (TTIP). Feedback has been overwhelmingly negative, with 97 per cent of 150,000 respondents opposed to the idea, reflecting the public's concern as to how this mechanism could impact on Europe should TTIP come to pass.

"Feedback has been overwhelmingly negative, with 97 per cent of 150,000 respondents opposed"

The consultation required people to respond to a questionnaire with their feedback on 12 issues regarding investment protection and ISDS in TTIP. The 12, explained in great detail, covered areas such as "safeguards on government's right to regulate in the public interest, full transparency of ISDS proceedings, ethical requirements for arbitrators, and a possible appeals body".

In the commission's press release, the feedback is described as "containing pre-defined, negative answers" suggesting that many respondents had not taken anything the commission has said into consideration when responding to the questionnaire.

However, the commission highlighted a number of areas that respondents were particularly concerned with, including "the protection of the right to regulate; the establishment and functioning of arbitral tribunals; the relationship between domestic judicial systems and ISDS; the review of ISDS decisions for legal correctness through an appellate (appeal) mechanism".

"Even without ISDS in TTIP, these outdated types of ISDS will remain. It is clear that the concerns about this old-fashioned form of ISDS are shared by both citizens and companies" - Marietje Schaake

Following on from this consultation, there will be further meetings with "EU governments, the European parliament, and different stakeholders including NGOs, businesses, trade unions, consumer and environment organisations", according to the commission.

It is hoped that from these consultations, the commission will be able to develop new and specific proposals for the TTIP negotiations that would address concerns surrounding the deal.

Within the European parliament, there has been division between the political groups on TTIP, particularly ISDS. Some groups have criticised the commission's conclusions for not going far enough and have even called for the removal of the mechanism from the trade deal, while others have praised the EU executive's response.


Parliament's reaction:


David Martin is S&D group trade spokesperson and a member of parliament's international trade (INTA) committee

The commission seems to be receptive to citizens' concerns but it is still very slow to react. It launched a civil society consultation process on ISDS to which almost 150,000 stakeholders replied. Trade commissioner Cecilia Malmström has rightly identified the problems of ISDS, but not yet provided adequate solutions.

Our group is open to looking at real improvements, but so far the potential dangers outweigh the benefits of ISDS. If the commission is not serious about a thorough reform, it would be best to withdraw ISDS altogether.


Bernd Lange (S&D) is chair of parliament's INTA committee

The results of the public consultation are in line with our demands: there is a need for a fundamental reform of the entire ISDS system, not just certain aspects of it. The current system presented in the consultation is flawed; this is why we have repeatedly called upon the commission to exclude such provisions from its agreements.

It is clear that any conclusions drawn from the commission's consultation on ISDS in TTIP must also apply to the Canada-EU trade agreement.


The chairperson of the EPP working group on the TTIP Godelieve Quisthoudt-Rowohl and the EPP group's spokesperson in parliament's INTA committee, Daniel Caspary made the following joint statement:

We welcome the final report and congratulate the European commission on the successful accomplishment of this huge logistical effort on the biggest public consultation ever. We call now for rapid and sound action by the commission to convert the results into concrete measures for the ongoing negotiations and standard EU-bilateral investment treaties texts. Our goal must be to find the right balance between protecting investors and safeguarding the EU's right and ability to regulate.

The EPP group is in favour of an effective ISDS system that will protect our European investors by implementing a well-balanced approach to TTIP, providing for better transparency and clearer definitions/wording on the basis of the CETA text. We therefore await the commission's conclusions and want to discuss them instead of refusing them outright as the S&D group and the Greens do. Their reaction is a false ideological one that leads to impasse and fear, and produces no alternative to meet the need to regulate global investment.

One cannot reject a clause without checking all the consequences of such a decision. For example, there are no clear indications on how to ensure the non-discrimination of EU investors in the US market. We have studied this issue with the commission and do not have any indication that this can be achieved without ISDS. Therefore, what we need to work on is whether there is a valid alternative to ISDS as a legal mechanism. If not, we should work for a reformed ISDS mechanism that can serve as a reference for the next investment agreements.

It is irresponsible to deny and oppose globalisation and the consequences it has on global trade and investment. Europe's success in a multipolar world - that we would like to be competitive and fair - depends on clear, efficient, predictable legal mechanisms. Europe needs to attract investors and investment and European economic actors need legal certainty to operate globally.


Yannick Jadot is the Green/EFA trade spokesperson and vice-chair of parliament's INTA committee

The commission is getting lost in the detail and deliberately ignoring the bigger picture of its consultation on the investor-state dispute settlement mechanism. The elephant in the room is that there is clear and overwhelming public opposition to ISDS. Instead, the commission's analysis of the consultation merely focused on the responses to the more specific questions. This analysis, combined with the superficial transparency steps on TTIP presented by the commission, show how the commission is trying to fob-off public concerns and demonstrates a total lack of respect for the public and civil society and their concerns.

This public opposition cannot be ignored. ISDS has no place in TTIP or EU trade policy in general. It is an opaque procedure, which can and is used by multinational corporations to whittle away EU standards and regulations across a range of policies from the environment to food safety to social protection. The commission and EU member states should finally acknowledge this and confine ISDS to history.

Beyond ISDS, the myriad of concerns with the TTIP negotiations and their implications for EU standards and the European public remains. There is a large and growing sense of unease and concern among the European public and civil society about the ongoing TTIP negotiations. This concern reflects the broad scope of the negotiations and their possible implications on European standards (food, health, environment, public services etc.), and is reinforced by the opaque negotiation process. The Greens will continue to fight against these negotiations and an agreement which undermines EU standards and democracy. With the European parliament now working on a new resolution on the TTIP negotiations, we hope other political groups will join with us to this end.


Marietje Schaake is the ALDE spokesperson for TTIP, vice-chair of parliament's delegation for relations with the US and a member of the INTA committee

It is good that so many people have taken the time to respond. We need a roadmap for ISDS because not only is this an issue within TTIP, European member states already have more than 1300 bilateral agreements which contain ISDS. Even without ISDS in TTIP, these outdated types of ISDS will remain. It is clear that the concerns about this old-fashioned form of ISDS are shared by both citizens and companies.

Many of the core concerns are clear from the reactions received, such as a lack of transparency and the independence of arbitrators. The commission has already made some suggestions for improving the current type of ISDS; but these do not yet go far enough. For example, they do not contain a possibility to appeal decisions; clear definitions are crucial. It is important that there is also a serious discussion on possible alternatives for ISDS.


Helmut Scholz is GUE-NGL group trade spokesperson, a member of parliament's INTA committee and the delegation for relations with the United States

This is a clear message: citizens, trade unions, local and regional governments and small and medium-sized companies do not want special courts for corporations to bring cases against individual sovereign states. The record 150,000 responses to the commission's questions show just how important this issue is for people.

A million signatures against TTIP were handed over to commission president Jean-Claude Juncker last December, and the result of this consultation is further evidence that public opinion rejects this project of big business.

It would be a serious mistake for the commission to ignore citizens' opinions. The report clearly indicates that the ISDS mechanism is perceived as a threat to democracy and public finances. The commission should now act to reflect this significant call from citizens and immediately throw out the ISDS.

ISDS should be deleted from the CETA trade agreement with Canada too. We will be voting on TTIP later this year - MEPs should keep in mind that citizens will be closely watching to see if their elected representatives in the parliament have taken heed of their concerns.


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