TTIP Update XXXIII - 150,000 ISDS Submissions

My last two updates concentrated on ISDS, and on the European Commission's consultation, such as it was. Flawed though it may have been, it did at least give people a rare - no, unique - opportunity to express their views on this aspect of TTIP....

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My last two updates concentrated on ISDS, and on the European Commission’s consultation, such as it was. Flawed though it may have been, it did at least give people a rare – no, unique – opportunity to express their views on this aspect of TTIP. And express it they did: although we have no official figures, I’m consistently hearing that well over 100,000 submissions were made [Update: we now have the official figure of 149,399, with 52,000 from UK, the top country – well done, everyone.] That’s an astonishing number for such an apparently obscure aspect of a trade agreement, and a clear reflection of how strongly people feel about this.

That’s surely not something the European Commission ever expected when it announced the consultation, and means that it can have no doubt about the public’s views on this matter. And yet, with typical contempt for democracy, Karel De Gucht, the commissioner handling the TTIP negotiations, called this massive demonstration of citizen engagement an “attack” (original in German.)

Criticism of the idea has come from just about every quarter. Here’s what happened on the No2ISDS site that I wrote about:

Friends of the Earth Europe, AK Europa and ÖGB Europabüro, set up an online platform to allow citizens to voice their concerns about ISDS. The website www.no2isds.eu has collected over 23,000 contributions from people across Europe and the US who fundamentally oppose the harmful investor-state arbitration system. Combined with initiatives from groups including 38degrees and SumofUs, this has contributed to a record number of over 100,000 contributions to the Commission’s public consultation.

European Trade unionists are against ISDS:

In a letter to European Trade Commissioner Karel de Gucht, Bernadette Ségol the General Secretary of the European Trade Union Confederation (ETUC) says trade unionists are “particularly concerned at statements from DG Trade implying that the consultation is about a reform of the ISDS system and is not open to a decisive rejection.”
The letter tells De Gucht very clearly “the ETUC is fundamentally opposed to the inclusion of ISDS in the Transatlantic Trade and Investment Partnership.”

In its formal response to the consultation the ETUC points out that “ISDS establishes a system of judicial protection which is only available for foreign investors. By definition, this additional system awards benefits to foreign companies which are not given to domestic companies. This discriminates against domestic companies. ISDS destabilises the domestic judicial system because public measures can be subject to two diverging legal assessments.”

It also calls for ISDS in the EU-Canada Trade Agreement to be frozen at least until it is resolved in TTIP.

So are health organisations [.pdf]:

Health Action International (HAI) Europe, the Commons Network, Knowledge Ecology International (KEI) Europe, Health GAP (Global Access Project), Salud por Derecho, the International Society of Drug Bulletins (ISDB), the Medicines in Europe Forum (MiEF) andUniversities Allied for Essential Medicines (UAEM) welcome the opportunity to submit a responseto this consultation. We believe, however, that this consultation, which aims to improve ISDS, is asking the wrong questions. ISDS cannot be improved. The real question is whether ISDS should be included in TTIP at all. The answer, very simply, is no.

As are leading members of the European Commission’s own TTIP advisory group:

Following the end of the public consultation on investor-state dispute settlement (ISDS) in the EU-US free trade negotiations (known as TTIP), the European Environmental Bureau, the European Public Health Alliance (EPHA) and Transport & Environment call on the European Commission to exclude ISDS from TTIP and to publish all contributions.

The EEB, EPHA and T&E are members of the EU’s TTIP advisory group representing civil society.

One of the most devastating analyses I have seen comes from over 100 leading academics:

In our view, the logical implication of the Commission’s stance [that ISDS is flawed and needs fixing] is to raise the key question that is not asked in the consultation document: why consider including investor-state arbitration in the TTIP at all? The rationale for bilateral investment treaties was traditionally linked to views about the potential impact on foreign investment of uncertainty caused by weak legal and judicial systems in host countries. While such a vision of failed statehood should in itself be examined further, it suffices to point out, in the context of the relationship between the US and the EU, that it is difficult to argue realistically that investors have cause to worry about domestic legal systems on either side of the Atlantic. Above all, with FDI [foreign direct investment] stocks of over ‚¬1,5 trillion either way, it is implausible to claim that investors in fact have been deterred. It is true, as the Commission points out, that nine Member States already have BITs in place with the US. It may also be true that, for these nine Member States, the new arrangement might be a better alternative than ‘doing nothing.’ That, however, hardly seems enough reason to impose on the other two thirds of Member States a Treaty that profoundly challenges their judicial, legal and regulatory systems. The consultation document comes up with one additional argument: that the rights each party grants to its own citizens and companies ‘are not always guaranteed to foreigners and foreign investors.’ The claim is unsubstantiated. Even if it is accepted, there is no obvious reason why the incorporation in TTIP of a simple norm of non discriminatory legal protection and equal access to domestic courts could not address the problem perfectly adequately.

You might predict criticism from many of these groups, especially those associated with green and left-wing groups, as here:

During Tuesday’s plenary session [of the European Parliament] GUE/NGL deputy Helmut Scholz addressed De Gucht, saying, "You carried out a public consultation on the inclusion of an investor state dispute settlement (ISDS) clause which received over 115,000 responses.

“Citizens don't want ISDS; neither in TTIP nor in the agreement with Canada,” the German deputy argued.

What you probably would not expect is that some of the most senior European politicians are also clearly turning against ISDS. Here, for example, is the MEP David Martin, whom some may remember as the rapporteur (Parliamentary expert) who helped kill ACTA:

The Socialists were proud to be at the birth of TTIP, and we do not want to be its assassins, and I want to tell the Commission clearly now, though, that if we have to be, we will be. And that’s why we want the Commission to listen carefully to our concerns.

This is the chairman of the European Parliament’s influential international trade (INTA) committee, which will give the main advice on whether or not to ratify TTIP:

German Socialist Bernd Lange, who said procedural rules would stop [right-wing MEP] Le Pen grandstanding or using sessions for publicity, also warned that an investor-state dispute settlement mechanism should be dropped from TTIP. If it wasn’t, he said, the Parliament’s next resolution on TTIP could be negative.

Finally, and perhaps most strikingly, this is what Jean-Claude Juncker, the President-elect of the European Commission, writing in his “Political Guidelines for the next European Commission” [.pdf], published earlier this week:

As Commission President, I will also be very clear that I will not sacrifice Europe’s safety, health, social and data protection standards or our cultural diversity on the altar of free trade. Notably, the safety of the food we eat and the protection of Europeans' personal data will be non-negotiable for me as Commission President. Nor will I accept that the jurisdiction of courts in the EU Member States is limited by special regimes for investor disputes. The rule of law and the principle of equality before the law must also apply in this context.

The plenary session of the European Parliament at which some of these comments were made included a rather lack-lustre speech by De Gucht on TTIP, which was met with a silent protest against TTIP from some MEPs. Rather less silent was a demonstration by activists during the TTIP stakeholder meeting for the latest round of negotiations:



Here in the UK, resistance to ISDS is centred around concerns that it could lock in the current rounds of NHS privatisation. This has become enough of a problem that the EU’s chief negotiator, Ignacio Garcia Bercero, has written a letter [.pdf] to one of the UK supporters of TTIP, John Healey, trying to assuage those fears. War on Want’s John Hilary has put together a splendid rebuttal to the claims made in the letter, but here I want to comment on the following key section:

Member States such as the UK are free to maintain and adopt new measures to control access to their health services market by foreign suppliers, without constraints under EU trade agreements. The EU does not intend to change its approach to health services in trade negotiations for TTIP

It is absolutely true that the UK will be free to run the NHS as it pleases, for example by re-nationalising the parts that have been privatised. But what Bercero omits to mention is the fact that the ISDS clause would allow US healthcare providers who supply NHS services to sue into the ground any UK government that did so. ISDS is not about forbidding government actions, just making them punitively expensive. That’s precisely why it must come out of TTIP, and why, judging by the growing rejection of ISDS across the political spectrum, it will.

Full list of previous TTIP Updates.

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