European Voice | 22.10.2014
Members states warn Juncker against ISDS concessions
As Juncker gives reassurances to the European Parliament over free trade with the US, 14 member states are urging him to stick to the script.
[More recent news & analysis on this over at the FT]
by Dave Keating
Jean-Claude Juncker, the president-elect of the European Commission, was warned by member states today (22 October) not to make concessions to MEPs on investor protection in a free trade deal between the European Union and the United States, according to a letter seen by European Voice.
In a speech to the European Parliament this morning, ahead of a vote to confirm his college of commissioners, Juncker told MEPs that he “took note” of the confusion and controversy around the issue of investor-state dispute settlement (ISDS) mechanisms that surfaced during the hearing of Cecilia Malmström, a Liberal from Sweden and the commissioner-elect for trade.
There was confusion over whether Malmström supports ISDS, which allows foreign corporations to bypass national courts and settle disputes with governments through international arbitration. Though such mechanisms are a regular feature of free-trade deals, many MEPs do not want one included in the EU-US free trade deal currently being negotiated. There has reportedly been disagreement between Malmström and Juncker’s team over whether to include ISDS in the deal, with Malmström preferring to keep it on the table.
“Let me once again state my position clearly,” Juncker said. “My Commission will not accept that the jurisdiction of courts in the EU member states be limited by special regimes for investor-to-state disputes.”
“In the agreement that my Commission will eventually submit to this house for approval there will be nothing that limits for the parties the access to national courts or that will allow secret courts to have the final say in disputes between investors and states,” he said. He announced that Frans Timmermans, the centre-left Dutchman designated to be Juncker’s right-hand man as vice-president for better regulation, will be overseeing Malmström’s work in this area. He said that ISDS will not be included in the free-trade deal unless Timmermans signs off on it.
Juncker’s assurances came despite receiving a letter from 14 member states yesterday (21 October) warning him that ISDS was part of the mandate for EU-US free trade negotiations agreed by member states. The German government is opposed to including ISDS in the free trade deal, and German MEPs make up the largest delegation in the European Parliament.
The letter, which is signed by trade ministers from countries including the UK, Ireland, Denmark, Spain and Lithuania, states that “the Council mandate is clear in its inclusion of investor protection mechanisms in the TTIP negotiations”.
“Many of the concerns about TTIP are based on misconceptions,” the trade ministers wrote. “For example, that TTIP could undermine public services, undermine the right of national governments to regulate, or undermine EU standards on food or health and safety. The response to those criticisms - as some are calling for and tempting as it may be – should not be to jettison the difficult issues. That will lead to a lowest common denominator deal at best or no deal at all.”
However Juncker appears to have ignored this warning today in his speech. Speaking at a press conference after the hearing, Juncker said that there is no difference between his position and Malmström’s.
“We cannot impose our will on our US friends while we are in the process of negotiating,” he said. But he added: “I should clearly say what my opinion is.”