The European Parliament is working on its position on the EU-US trade deal known as the Transatlantic Trade and Investment Partnership (TTIP).
The EU’s trade commissioner Cecilia Malmstrom, sought to overcome one of the biggest disputes blocking an accord with the United States, offering to radically change the way companies would resolve conflicts in transatlantic business, reports Reuters.
Many Europeans fear U.S. multinationals will use the so-called investor-to-state dispute settlement (ISDS) mechanism to challenge food and environmental laws in Europe on the grounds that these restrict free commerce. Malmstrom is trying to convince a sceptical European Parliament, which must sign off on any deal, to support an accord containing investment arbitration because the United States says it cannot accept a deal without it.
While sensitive issues range from genetically-modified crops to how chicken is disinfected in the United States, no other subject has united European opposition to the proposed EU-U.S. accord as much as investment arbitration. Unblocking the issue with a revamped form of ISDS could help negotiators reach a trade deal by the end of 2015.
Malmstrom defended the ISDS mechanism, saying that European companies needed it because U.S. law does not bar discrimination against foreign investors. She said if only state-to-state disputes are allowed, only big cases would be pursued.
Other ideas include allowing governments to nominate a limited list of arbitrators to decide on all disputes, having an appeal mechanism and forcing companies to drop proceedings in national courts if they go to an ISDS tribunal. The EU could even consider creating a permanent investment court.
The trade deal can only enter into force if it has been approved by both the Council and the European Parliament. MEPs have already warned that they would not approve the agreement at any cost and that they will be closely looking at issues such as food standards.
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