Tuesday

25th Sep 2018

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.

Feature

Missing signature gaffe for Azerbaijan gas pipeline

A joint declaration on the Southern Gas Corridor project, which should deliver Azerbaijani gas to Europe by 2020, will remain secret - because the Turkish energy minister left before signing.

Visual Data

Every major city in Europe is getting warmer

An exclusive analysis of over 100 million meteorological data points shows that every major city in Europe is warmer in the 21s​t​ century than it was in the 20t​h​. Northern regions, Andalusia and southern Romania are most affected.

Opinion

No chance of meeting EU renewable goals if infrastructure neglected

Following the 2030 renewable target of 32 percent, chair of the European Parliament's environment committee Adina Valean argues in order to reach our climate and energy goals, we need both public and private investment over the next decade and beyond.

News in Brief

  1. ECB's Draghi set to clarify role in secretive G30 group
  2. Half of EU states at risk of missing recycling target
  3. Commission refers Poland to EU top court over rule of law
  4. Open Society Foundation takes Hungary to court
  5. EU court asked to rule on halting Brexit
  6. EU threatens Switzerland on stock trading
  7. Italy's new basic wage restricted to Italians
  8. UK tycoon offers to create pro-Brexit party

Agenda

Brexit and MEPs expenses in the spotlight This WEEK

The EU will be watching closely how the political dynamics of Theresa May's Conservative party conference starting next week will influence Brexit negotiations. MEPs might also be forced to release their office expenses.

Feature

Sound of discord at 'Sound of Music' Salzburg summit

Decisions in the EU are a complicated process of intense negotiations, quid pro quos and horse-trading, until an agreement can finally be reached. But that didn't happen in Salzburg.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Missing signature gaffe for Azerbaijan gas pipeline
  2. Every major city in Europe is getting warmer
  3. No chance of meeting EU renewable goals if infrastructure neglected
  4. Brexit and MEPs expenses in the spotlight This WEEK
  5. Wake-up call on European Day Against Islamophobia
  6. Sound of discord at 'Sound of Music' Salzburg summit
  7. Salzburg summit presses for bigger Frontex mandate
  8. UK's post-Brexit plan 'will not work', EU says

Join EUobserver

Support quality EU news

Join us