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MEPs voted for the system, which allows multi-national corporations to directly sue governments in private arbitration panels with potential awards paid by taxpayers, to be retained in the Transatlantic Trade and Investment Partnership (TTIP) – though it would be repackaged under a different name.
T&E, a member of the Commission’s Advisory Group on TTIP, has repeatedly stressed its strong opposition to ISDS because it undermines the rule of law, makes citizens pay for corporate risk, and creates a ‘fright to regulate’ where governments do not dare to legislate out of fear of litigation.
Cécile Toubeau, T&E’s sustainable trade officer, said that by backing ISDS the trade committee (also known as INTA) displays a lack of trust in European judicial systems. ‘In the clash between lobbyists and the public interest, INTA MEPs side with the former by backing this deeply flawed private arbitration system,’ she said. ‘Not only do they not trust our courts, they are also willing to have Europeans pay for the private risks of big business, and tie the hands of future EU lawmakers by providing a implicit deterrent to public-interest regulation.’
The trade committee also failed to take a stance on what T&E say is the core issue of TTIP – Europe’s right to set its own environmental and safety standards. Campaigners have cited the impact of the EU-Canada agreement (CETA) on the Fuel Quality Directive as an example of trade negotiations’ substantial influence on the EU’s independence to set its own rules.
The vote also marks a U-turn by MEPs after the Parliament’s environment committee said no to ISDS and laid out the areas to which so-called ‘regulatory cooperation’ – mutual recognition of standards – should not extend. It said cooperation beyond information exchange in the areas of sanitary and phytosanitary (SPS) issues, animal welfare and chemical regulation would be unhelpful as rules in the EU and US are based on completely different principles.
Cécile Toubeau continued: ‘Sadly the trade committee of the European Parliament have not listened to their expert colleagues in the environment committee who worked very hard to develop a resolution that would foster trade but also safeguard our regulatory freedom. The trade committee’s approach to the widely discredited investor protection clause is symptomatic. We hope MEPs will mobilise to fix this resolution in plenary vote next month.’