Thursday

14th Dec 2017

EU and Canada agree on dispute settlement court

  • Malmstroem: the investor court system "is in CETA, we'll see what happens in TTIP." (Photo: European Commission)

EU and Canada have agreed on a permanent investor court system to be included in their free trade agreement, in a decision the EU hopes will be replicated in its trade talks with the US.


In a last round of talks, the European Commission and the Canadian government completed scrubbing over the legal elements of the Comprehensive Economic and Trade Agreement (CETA) they had finished negotiating in 2014.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"This is good news," EU trade commissioner Cecilia Malmstroem said at a press conference on Monday.

"It is good sign that we can cooperate and that we have listened to the concerns."

The investment chapter had remained open in the face on criticism on both sides of the Atlantic about investor-state dispute settlement (ISDS), an ad hoc arbitration system that was included in the first version.

A permanent and institutionalised dispute settlement tribunal will be set up instead, with judges appointed in advance by the EU and Canada, and an appeal mechanism will be put in place.

The agreement also has "stronger language" on the rights of states to regulate, and judges will be "bound by a very strict ethical code of conduct," Malmstroem said.

For the EU, the new settlement system, called investor court system (ICS) should also be part of the ongoing negotiations for a Transatlantic Trade and Investment Partnership (TTIP) wih the US.

As in CETA, the ISDS has been widely criticised by TTIP opponents, and last autumn Malmstroem proposed an investor court system (ICS) to replace it. An ICS has already been put in place with Vietnam and is now agreed with Canada.


"The mandate I have from the member states is to try to introduce all this new system in TTIP but also in all future negotiations until we have a permanent multilateral court," Malmstroem said.

"It's in CETA, we'll see what happens in TTIP," she said.

During the latest round of talks in Brussels last week, US negotiators did not commit to endorse the investor court system (ICS) put forward by the EU.



"We are pursuing those discussions with full understanding of what the objectives are behind these provisions and with a focus on how best we can achieve what are essentially commonly shared goals and outcomes in this area,” the chief US negotiator Dan Mullaney said Friday (26 February).

Malmstroem said the ICS responded to the demands of the European Parliament and member states. But it has been rejected by German judges as illegal. In early February, the German Association of Magistrates, a Berlin-based judicial umbrella organisation, said it saw "neither a legal basis nor a need for such a court".

The trade commissioner assured that CETA was "a very good agreement" which would remove 99 percent of customs and duties between Canada and the EU and save 407 million per year in tariffs.

CETA will now have to be translated into the other EU languages before the commission can formally publish its legislative proposal to ratify the agreement, in May or June.

"If everything goes well," the Council of member states and the European Parliament could approve CETA before the end of the year, Malmstroem said.

A question remains over whether EU member states will be called on to ratify the deal as well.

Officials said that the commission had not decided yet whether it would consider CETA a mixed agreement, requiring national approval, or an EU agreement, where the EU Parliament and Council's approval is enough.

In any case, the final decision on ratification will be up to the council.


TTIP: US yet to approve EU investor court plan

The United States “understands” why the European Union wants to include an investor court system in the TTIP agreement, but has not yet given an opinion on the EU's proposal itself.

Opinion

The seven sins of the EU investment court

The investor dispute settlement mechanism the EU and Canada have agreed to include in their free trade agreement gives the same privileges to large companies as its contested earlier versions.

Facebook to shift ad revenue away from Ireland

Public pressure about low corporate taxes appear to have pressured Facebook to launch plans to stop routing international ad sales through its Dublin-based headquarters in Ireland.

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Estonia completes two out of three priority digital bills
  2. EU countries are not 'tax havens', parliament says
  3. Tech firms' delays mean EU needs rules for online terror
  4. Slovak PM: Human rights are not a travel pass to EU
  5. British PM limps to EU capital after Brexit defeat
  6. US pleads for clarity on Brexit aviation 'black hole'
  7. Tusk migration note prompts institutional 'hysteria'
  8. Migration looms over summit, as Africa pledges fall short

Stakeholders' Highlights

  1. EPSUEU Blacklist of Tax Havens Is a Sham
  2. EU2017EERole of Culture in Building Cohesive Societies in Europe
  3. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  4. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  5. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  6. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  7. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  8. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  9. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  10. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  11. Dialogue PlatformThe Turkey I No Longer Know
  12. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives