The European Commission has published its investor-to-state dispute settlement (ISDS) reform proposal for the EU-US trade agreement under negotiation (TTIP). (EP agenda)
Vrijschrift letter to the members of the European Parliament international trade committee:
Dear Members of the INTA committee,
Today you will discuss the European Commission's ISDS reform proposal for TTIP.
The commission's proposal institutionalises discrimination. It gives foreign investors -- and only foreign investors -- the right to exit domestic legal systems and use supranational adjudication to challenge government decisions. Supranational adjudication places the development of law outside democratic oversight.
On the positive side, the proposal removes a relic: unfair procedural advantages for the United States. However, the proposal contains a loophole and fails to protect policy space.
The proposal would create perverse incentives. The adjudicators would be paid per day worked, without prohibition on outside remuneration. This creates perverse incentives to give foreign investors value for money as only foreign investors can start cases. The proposal doesn't provide certainty that this will ever change.
Societies have to be able to change course, for instance to reform copyright or to effectively protect privacy. The proposal would place (for-profit) supranational investment adjudicators above democracies. The adjudicators would assess whether democratic decisions are arbitrary from a foreign investment protection point of view. This creates major risks for democracies and civil rights.
Furthermore, the commission undermines any possible positive element in its reform proposal as it intends to add old ISDS to the trade agreements with Canada and Singapore, giving foreign investors the possibility to route their investments into the EU through these countries.
The right approach is to improve weak aspects of domestic legal systems. This provides equal access to the law and doesn't remove democratic oversight of the development of law. Investors can take political risk insurance for additional certainty.
Yours sincerely,
Ante Wessels
Vrijschrift Foundation
https://www.vrijschrift.org/
