Arbitration may be dropped from EU-US trade deal 

The EU’s incoming trade chief on Monday raised the possibility that controversial investor protections which she described as politically “toxic” could be dropped from a new transatlantic trade deal, suggesting the pact could be less ambitious than Washington and Brussels had hoped.

“It is indeed a very toxic issue in this parliament and elsewhere,” Ms Malmström said at her confirmation hearing as EU trade commissioner before the European parliament. “Will it stay in [the EU-US deal]? I don’t know. Maybe not. But it is too early to judge on that.”

The US said it remained committed to including investor protections in any EU-US trade pact, the latest round of negotiations for which got under way in Washington on Monday.

“Our hope is that TTIP will set the standard for trade agreements around the world and we look forward to working with the new Commission,” said Trevor Kincaid, spokesman for the office of the US Trade Representative.

Vehement objections in Germany and the European parliament to the arbitration system, which would allow companies to use international dispute settlement panels instead of national courts to seek compensation, has caught advocates of the trade deal by surprise.

According to the United Nations Conference on Trade and Development, 568 cases have been brought under such arbitration systems around the world over the last 50 years, with 53 per cent of those cases launched by EU companies. The US accounted for 22 per cent of the cases.

EU companies are behind many of the cases because EU governments have since the 1950s put in place hundreds of bilateral investment treaties with developing countries that allow for arbitration.

 

Source: FT- Arbitration may be dropped from EU-US trade deal

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