Wednesday

14th Apr 2021

Investor clauses could be left out of EU-US trade deal

  • Controversial investor protection clauses could be left out of an EU-US trade deal, Malmstrom told MEPs

The EU's likely next trade commissioner has signalled that controversial investor protection rules allowing companies to sue governments could ultimately be left out of a transatlantic trade deal with the United States.

"I don't exclude that in the end it will be taken out," Swedish nominee Cecilia Malmstrom told MEPs during a public hearing on Monday (29 September), although she insisted that it would be 'premature' to exclude the clause from the talks, known as TTIP, already.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The status of the investor protection clauses, known as investor state dispute settlement, dominated the three hours of questioning faced by Malmstrom, currently serving as the EU executive's home affairs commissioner.

The mechanism allows companies to take legal action against governments if their decisions risk undermining their investments.

Critics of ISDS claim 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.

Although Malmstrom's answers were more critical of ISDS provisions than the incumbent commissioner Karel de Gucht, with the Swedish official remarking that "I agree that there are problems with ISDS because there have been abuses," her responses will fall short of expectations for a number of MEPs.

While leaving her options open on the EU-US talks, Malmstrom ruled out the possibility of re-opening the just-concluded trade agreement with Canada to exclude ISDS, commenting that "eliminating ISDS from the Canada agreement would be a very bad idea" and could "unravel the agreement".

On Friday (26 September), Green MEP Sven Giegold published a draft of Malmstrom's written replies to questions posed by the committee in which the commissioner designate indicated that she would be prepared to leave TTIP out of the negotiations.

However, commission officials quickly backtracked, claiming that the answer had been based on the inaccurate reporting of a quote made by Jean-Claude Juncker, the next commission president.

Addressing MEPs, Malmstrom apologised for what she described as a "mix-up" in sending her written answers to the committee.

EU countries are already signed up to over 1,400 ISDS agreements, but the question of whether such provisions should be included in TTIP has become a sticking point in the talks.

Last week, German economics minister Sigmar Gabriel called on the commission to re-open the trade talks with the Canadian government to remove ISDS, on the basis that foreign investors already have sufficient legal protection in national courts.

David Martin, trade spokesman for the centre-left Socialist and Democrat group told Malmstrom that ISDS had become "a toxic issue for this parliament".

In response, Malmstrom said that MEPs had previously tasked the commission with drawing up a common EU approach to ISDS. "We need to limit the scope for abuse and increase transparency… make it clear that it can only be used as a last resort" she remarked.

The parliament's left-wing and Green groups have said they will not support future trade agreements which include ISDS provisions.

However, both US and EU trade officials have so far argued that ISDS should remain in any pact, and that it would not limit the right of governments to legislate in the public interest.

Meanwhile, Malmstrom promised she would increase MEPs' access to negotiation documents and publish a list of her meetings and correspondence with lobbyists on the trade talks, commenting that the EU executive "must demonstrate that we are not negotiating a secret deal behind the parliament's back."

The hearings for the 27 commission nominees will continue this week and will conclude on 7 October. MEPs will then vote on whether to back the commission team assembled by Jean-Claude Juncker.

News in Brief

  1. EU states make progress on Covid-19 'travel certificates'
  2. Michel pledges to protect von der Leyen's 'dignity' in future
  3. Libya frees UN-sanctioned human trafficker
  4. European court: jailed Turkish writer's rights violated
  5. EU set to miss 1m electric charging points by 2025 target
  6. Lavrov expects Iran nuclear deal to be saved
  7. France suspends flights from Brazil due to Covid variant
  8. Johnson & Johnson delays roll-out of vaccine in EU

Column

Muslims, Ramadan, and myths facing 'European civilisation'

Happy Ramadan? The UN special rapporteur on freedom of religion or belief warned the Human Rights Council last month that institutional suspicion of Muslims and those perceived to be Muslim has escalated to "epidemic proportions" worldwide.

Opinion

Will Romania be EU's Green Deal laggard?

Of the €30bn allocated to Romania under the EU recovery fund, just four percent is slated to go to renewable energy and energy-efficiency. Despite the pressing need to decarbonise Romania's heat and power sectors, this is not an investment priority.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. Nato and US urge Russia to back off on Ukraine
  2. Future EU platform seeks to 'stay clean' of hate speech
  3. Denmark threatens Syria deportations amid EU concerns
  4. MEPs raise concerns on vaccine 'travel certificates'
  5. Will Romania be EU's Green Deal laggard?
  6. Muslims, Ramadan, and myths facing 'European civilisation'
  7. Europe & Africa - rebuilding the future
  8. How the pandemic became an EU goldmine for crime

Join EUobserver

Support quality EU news

Join us