Wednesday

24th Apr 2019

EU commission freezes US talks on company protection

  • De Gucht has come under pressure over the rights of companies to litigate against EU governments (Photo: consilium.europa.eu)

The European Commission has halted EU-US trade talks related to legal protection for companies and launched a three-month public consultation on the matter.

Negotiations between EU and US trade officials began last September. They are meant to lead to a trade deal which the EU claims could be worth an extra 1 percent to the bloc's economic output.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

But the issue of rules to protect investors' rights, known as investor state dispute settlement (ISDS), has proved controversial.

The commission says that ISDS is needed to protect investors from unfair treatment at the hands of foreign governments and discrimination in favour of domestic firms.

Critics say that investor claims can prevent governments from passing legislation in fields such as environmental and social protection, enabling corporations to claim potentially unlimited damages in "arbitration panels" if their profits are adversely affected by new regulations.

They also claim that arbitrations are carried out in secret by trade lawyers.

Campaigners point to a recent move by tobacco giant Philip Morris to sue the Australian government over new legislation requiring plain packaging for cigarettes sold in the country.

They say this is an example of what the EU could face.

In a statement released on Tuesday (21 January), EU trade commissioner Karel De Gucht said that governments needed to "treat investors fairly, so they can attract investment."

But he conceded that "some existing arrangements have caused problems in practice, allowing companies to exploit loopholes where the legal text has been vague."

"Some people in Europe have genuine concerns about this part of the EU-US deal," he added.

De Gucht said he was "determined to make the investment protection system more transparent and impartial, and to close these legal loopholes once and for all."

The commissioner said he would publish an EU text on investment protection in March prior to the next round of talks between EU and US officials - scheduled the same month in Brussels.

A spokesman for consumers' interest group BEUC, Johannes Kleis, welcomed the EU executive's move.

"When the consultation is closed, we expect the commission to explain how they plan taking the feedback they received into account," he said.

The EU executive is anxious to retain public support for the trade talks, following the collapse of the anti-counterfeit treaty Acta in July 2012 at the hands the European Parliament.

Under the EU treaties, the parliament has the final say on whether to approve trade deals brokered by the commission.

MEPs have already expressed concern about ISDR leading to a system where national governments or the EU are sued by companies because of changes in regulation.

"The [ISDS] mechanism is unnecessary in an agreement between two countries that fully respect the rule of law," said the parliament's centre-left socialist and democrat group in a statement Tuesday.

"Accepting the ISDS would mean opening the door for big corporations to enforce their interests against EU legislation," it added.

The commission has also set up an advisory committee representing business and consumer groups, which met for the first time on Tuesday, to feed into negotiations.

Weber vow to block Nord Stream 2 amid 'sue' threat

Manfred Weber, the leader of the centre-right EPP political group, has vowed to block the Nord Stream 2 pipeline. The pledge comes amid a new threat from the CEO of Nord Stream 2 to sue the European Union.

Opinion

'Next Juncker' must fix EU's corporate power problem

The time for genuine lobby regulation and a stop to the risk of corporate capture of EU policy-making is now. It is a question of survival and must be a priority for the next head of the European Commission.

EU want Facebook pan-EU advert fix for May elections

EU institutions want Facebook to relax its rules, to allow pan-European political groups to carry out EU-wide campaigns. Facebook has yet to implement the demands - posing questions on the extent to which Europe relies on the US tech firm.

News in Brief

  1. Political deadlock looms at Sunday's Spanish election
  2. Le Pen in Copenhagen for talks with new key ally
  3. Trump to meet May and Macron on Europe visit in June
  4. Johnson's sister to run in EU elections on new list
  5. Weber pledges to 'block' Nord Stream 2 as president
  6. UK warns migrants not to cross 'dangerous' Channel
  7. Austria's FPO publishes racist poem
  8. Spanish party leaders spar over Catalonia

Opinion

'Next Juncker' must fix EU's corporate power problem

The time for genuine lobby regulation and a stop to the risk of corporate capture of EU policy-making is now. It is a question of survival and must be a priority for the next head of the European Commission.

Magazine

All about the European Parliament elections 2019

EUobserver's new magazine is meant to help readers prepare for the European Parliament elections, no matter their level of knowledge. You can download and read the entire magazine now.

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Latest News

  1. Weber vow to block Nord Stream 2 amid 'sue' threat
  2. 'Next Juncker' must fix EU's corporate power problem
  3. EU want Facebook pan-EU advert fix for May elections
  4. Ukraine comic-president invited to EU capitals
  5. Trump's Israel plan to 'test' EU resolve
  6. Romania drafts EU code on NGO migrant rescues
  7. Bulgaria, Hungary, and Malta shamed on press unfreedom
  8. EU drafts $20bn US sanctions list in aviation dispute

Join EUobserver

Support quality EU news

Join us