EU Parliament EPP group in favour of ISDS

The European People’s Party (EPP), the biggest group in the European Parliament, is in favour of investor-to-state dispute settlement (ISDS). I will discuss their position and conclude it creates three risks.

First, it risks subjecting the EU to a corrupt adjudicative system. Second, it risks undermining the EU court’s exclusive jurisdiction over the definitive interpretation of EU law. Third, it risks crashing upcoming EU trade agreements.

Investor-to-state dispute settlement is a highly controversial arbitration mechanism. The EU commission wants to include it in trade agreements. Last year they launched a public consultation; on 13 January 2015 they published the results.

The Parliament Magazine collected statements from European Parliament spokespersons on the results of the ISDS consultation. I will discuss the EPP statement on ISDS; to avoid cherry picking, I will quote the whole statement. (INTA: international trade committee)

European People’s Party

“The chairperson of the EPP working group on the TTIP Godelieve Quisthoudt-Rowohl and the EPP group’s spokesperson in parliament’s INTA committee, Daniel Caspary made the following joint statement:

We welcome the final report and congratulate the European commission on the successful accomplishment of this huge logistical effort on the biggest public consultation ever. We call now for rapid and sound action by the commission to convert the results into concrete measures for the ongoing negotiations and standard EU-bilateral investment treaties texts. Our goal must be to find the right balance between protecting investors and safeguarding the EU’s right and ability to regulate.

The EPP group is in favour of an effective ISDS system that will protect our European investors by implementing a well-balanced approach to TTIP, providing for better transparency and clearer definitions/wording on the basis of the CETA text.”

ISDS does not respect the separation of powers, lacks institutional safeguards for independence and creates perverse incentives. This is true for the old style investment agreements, the EU – Canada (CETA) text, the consultation text (based on CETA) and the EU – Singapore text.

Better transparency and clearer definitions/wording on the basis of the CETA text do not fundamentally change the system: they do not separate powers, do not create institutional safeguards for independence, and do not take away perverse incentives. The EPP approach would fail to sufficiently reform the system.

Last summer over 110 scientists published their submission to the ISDS consultation, the Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP). The statement shows the commission failed to solve a long list of serious issues. The commission’s reforms failed.

“We therefore await the commission’s conclusions and want to discuss them instead of refusing them outright as the S&D group and the Greens do. Their reaction is a false ideological one that leads to impasse and fear, and produces no alternative to meet the need to regulate global investment.”

Adjudicative processes have to be free of reasonably perceived bias.

As we saw above, the commission’s reforms failed and the EPP approach would fail. The commission never acknowledged the institutional issues: we can not expect the commission to solve them. No ISDS is the right approach now.

“One cannot reject a clause without checking all the consequences of such a decision. For example, there are no clear indications on how to ensure the non-discrimination of EU investors in the US market. We have studied this issue with the commission and do not have any indication that this can be achieved without ISDS.”

The commission and EPP must have overlooked the Statement of Concern published by over 110 scientists: “The consultation document comes up with one additional argument: that the rights each party grants to its own citizens and companies ‘are not always guaranteed to foreigners and foreign investors.’ The claim is unsubstantiated. Even if it is accepted, there is no obvious reason why the incorporation in TTIP of a simple norm of non discriminatory legal protection and equal access to domestic courts could not address the problem perfectly adequately.”


“Therefore, what we need to work on is whether there is a valid alternative to ISDS as a legal mechanism. If not, we should work for a reformed ISDS mechanism that can serve as a reference for the next investment agreements.”

This frames the issue in a wrong way. With this approach the EPP positions itself to reject alternatives. After that only reform of ISDS would be an option. We already saw that the EPP proposed reforms that would be insufficient. The end result would be a corrupt ISDS system.

The correct question is: how do we design adjudicative systems that are free of reasonably perceived bias. Never settle for less.

With the euro the EU settled for a broken system. We see the results. Broken systems lead to severe problems in the future.

“It is irresponsible to deny and oppose globalisation and the consequences it has on global trade and investment. Europe’s success in a multipolar world – that we would like to be competitive and fair – depends on clear, efficient, predictable legal mechanisms. Europe needs to attract investors and investment and European economic actors need legal certainty to operate globally.”

I make three remarks. First, broken systems harm our future. Second, the EU has a good legal system, more than sufficient to attract investors. Third, Europeans investing globally can choose which county to invest in, and local courts, state-to-state arbitration, insurance and contracts are alternatives to ISDS.

EU Treaties

The 18 December 2015 EU Court of Justice Opinion 2/13 suggests that ISDS is not compatible with the EU treaties. The EU court has exclusive jurisdiction over the definitive interpretation of European Union law. ISDS tribunals do not only interpret and apply provisions of investment agreements, but also interpret local laws. Nothing would stop them from interpreting and applying EU law. This would undermine the EU court’s exclusive jurisdiction.

Vrijschrift proposed that the Commission ascertain that adjudicative systems in trade agreements are compatible with the Treaties.

Three risks

The EPP approach on ISDS creates three risks. First, it risks subjecting the EU to a corrupt ISDS system. Second, it risks undermining the EU court’s exclusive jurisdiction over the definitive interpretation of EU law. Third, it risks crashing upcoming EU agreements by holding on to ISDS.

See also: EU liberals seem ready to sacrifice our democracy

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Seven things you should know about EU-Singapore ISDS

In October 2014 the European Commission published the draft text of the EU-Singapore trade agreement (EUSFTA) investment chapter. It contains investment protection rules for foreign investors and the controversial investor-state dispute settlement (ISDS), which gives foreign investors special rights in conflicts with governments.

Seven things you should know about this investment chapter:

1. The agreement creates a lock-in. Unlike most investment agreements ratified by European countries, it is not a stand-alone investment treaty, from which parties can withdraw. The investment chapter is part of a trade agreement, from which it is near impossible to withdraw.

2. The text lacks basic institutional safeguards for independence, creates perverse incentives and does not observe the separation of powers. (See below.)

3. The EU and Singapore would give automatic consent to arbitration. (article 9.19.2 EUSFTA)

4. The text contains broad investor protection rules, including the Fair and Equitable Treatment protection. Dan Ikenson: “ISDS is ripe for exploitation by creative lawyers.” (See also Scientists, answer to question 3)

5. The text does not exclude sovereign debt instruments. Last summer over 110 Scientists wrote: “In light of the social misery and hardship the sovereign debt crisis has brought, it requires little discussion to conclude that the mere thought of speculative investors in government bonds seeking damages before investment arbitration Tribunals is utterly unacceptable.” (Scientists, answer to question 1)

6. Open to the world: multinationals (and speculative investors) from other countries can use the EU-Singapore agreement.

7. A strategic mistake: like in the trade agreement with Canada (CETA), executive officials with a link with the United States would play a role in appointing arbitrators and decide conflicts of interest. How smart is that in and of itself, and in agreements that are models for an agreement with the US?

Lock-in, no institutional safeguards for independence, perverse incentives, no separation of powers, automatic consent, ripe for exploitation, sovereign debt instruments included, open to the world, and a strategic mistake. Former trade commissioner De Gucht left us a Gordian Knot.

Some details

No institutional safeguards for independence

The text lacks basic institutional safeguards for independence: tenure, prohibitions on outside remuneration by the arbitrator and neutral appointment of arbitrators.

Perverse incentives

Arbitrators are paid for their task at least 3000 US dollar a day. This creates perverse incentives: accepting frivolous cases, letting cases drag on, letting the only party that can initiate cases (foreign investors) win to stimulate more cases, pleasing the officials who can appoint arbitrators.

See also Scientists, answer to question 8.

No separation of powers

Both the claimants and the executive have a 50% influence on the make-up of tribunals. In a court neither the claimant nor the executive has an influence on appointments, as both parties are not neutral.

A government may dislike a law by the former legislative and appoint an arbitrator accordingly. Only independent courts should decide on constitutional matters and questions of law.

The ISDS mechanism does not observe the separation of powers – a core aspect of modern democratic societies. See also the next section.

US influence

The International Centre for Settlement of Investment Disputes (ICSID) is the most used ISDS forum; investors can choose this forum. In practice the US appoints the president of the World Bank. This president

- is ex officio chairman of the ICSID Administrative Council (article 5 ICSID),
- nominates the ICSID secretary-general (article 10 ICSID),
- appoints all three the arbitrators in annulment cases under ICSID rules (the only possible appeal, article 52.3 ICSID).

The secretary-general of ICSID
- appoints arbitrator(s) if parties fail to appoint one, or fail to agree on the presiding arbitrator (articles 9.21.2 and 9.32.7 EUSFTA),
- may decide a request for consolidation is manifestly unfounded (article 9.32.4 EUSFTA),
- appoints the presiding arbitrator in consolidation cases unless parties agree otherwise (article 9.32.6 EUSFTA),
- will decide on conflicts of interest (article 9.21.10 EUSFTA).

Executive officials who have a link with the US would take important decisions. How smart is that in and of itself, and in an agreement that is a model for an agreement with the US? (The same is true for CETA, except article 9.32.6 EUSFTA.)

Arbitrator power

Based on these procedural rules, the small club of arbitrators can maximise their power by benefiting investors (without being too obvious) and not harming the US.

It seems this is already happening under existing treaties. A study finds that claimants from the US were 91% more likely to benefit from an expansive resolution than claimants from all other states combined. (Van Harten, 2012) The US never lost an ISDS case.

Differences with consultation reference text

EUSFTA is mostly similar to the reference text the European Commission published this spring for the ISDS consultation (and to the CETA text). Main differences are: no filter (consultation question 10); no most-favoured nation (MFN, consultation question 2), other than compensation for losses owing to war, etc (article 9.5 EUSFTA); explicit umbrella clause (consultation question 3, article 9.4.5 EUSFTA); a code of conduct (page 37) instead of a reference to the International Bar Association Guidelines on Conflicts of Interest in International Arbitration; consultation question 8).

The code of conduct does not have a clear prohibition on outside remuneration by the arbitrator; it is in conflict with the ISDS system itself, as ISDS creates perverse incentives.

Submissions to the ISDS consultation are still mostly valid for EUSFTA.

See for instance:

Over 110 scientists published a “Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP)

FFII submission: “ISDS: A rigged system, avoid lock-in

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EU liberals seem ready to sacrifice our democracy

Marietje Schaake, the European Parliament’s liberal group’s (ALDE) spokesperson on the trade agreement with the US (TTIP) published a blog on investor-state arbitration (ISDS).

I will discuss her arguments below; to avoid cherry picking, I will quote her whole blog (for the links and images see her blog).

I conclude that a majority of the European Parliament liberal group seems ready to sacrifice the separation of powers, and democracy, for no good reason. As things stand now, the liberals won’t fight for our democracy.


“ISDS – what’s going on?
Posted in: Timeline, Top Stories

One of the most hotly debated topics around the negotiations of a trans-Atlantic Trade and Investment Partnership (TTIP) is the so-called Investor-State Dispute Settlement (ISDS) mechanism. However, many of you may ask, ‘what exactly is ISDS?’

In 1959, Germany became the first country to conclude a bilateral investment agreement when it closed an agreement with Pakistan. It is unclear when exactly the first ISDS clause was introduced, though the agreement between the Netherlands and Kenya of 1970 contains an early reference (article 11). By the ’80s ISDS clauses were common features in bilateral investment agreements. This clause allows a company, from either of the two countries investing in the other, to bring the government of that country before an international arbitration court if it believes it has been unfairly treated. This would be for example if property is expropriated or if a contract is broken. In most bilateral agreements, investors are granted access to the domestic legal system, while sometimes requiring investors to exhaust all local remedies before proceeding to international arbitration.

ISDS clauses have been especially popular for Western governments and companies when closing an agreement with a country where the rule of law was not a given. (This study, commissioned by the Dutch government, provides a good oversight of the history and development of ISDS) Companies often seek legal certainty before they make large-scale investments. The idea of creating rules to facilitate investment makes sense from that angle. We should not forget that investment is a very important foundation of economic growth. The current European stagnation is partly caused by a lack of access to capital, for example for SMEs.”

Schaake wants more inbound investments. She wants to give foreign investors legal certainty. Europe has received massive investments; lack of legal protection has never been an issue. Lack of legal protection did not cause our crisis, and more legal protection will not solve our crisis. There is no convincing evidence that ISDS leads to more inbound investments. Brazil never ratified ISDS agreements; it continues to receive lots of foreign investment. There is no link between lack of ISDS and our current stagnation. Schaake suggests a way out of our crisis that is a fata morgana.

Democratic process

“Although TTIP has brought ISDS to the current public debate, it is not new. There are over 3000 agreements containing ISDS clauses in the world, and many of the 1400 bilateral agreements EU member states have also contain ISDS. It has become a complex patchwork, and European member states even have ISDS in agreements with each other. The most infamous European ISDS case, concerning Vattenfall challenging the loss of investment as a result of the banning of nuclear energy, has been filed under the agreement between Germany and Sweden. There has been no ruling yet.

Opponents of ISDS claim it would derail the democratic process and allow companies to sue governments left, right and centre. But has this been the case so far? In the 55 years since the conclusion of that first ISDS clause by Germany, 568 cases have been initiated, of which 274 have been concluded (i.e. 294 cases are still pending). Of these, 43 per cent were concluded in favour of the states, 31 per cent in favour of the investor and 26 per cent has been settled.”

These numbers are incomplete; they only count the known cases and they do not count the threats. The settled cases have incurred unknown costs on states. Threats, cases and legal costs all have a chilling effect.

“Moreover, more than half (54 per cent) of the cases were brought by companies from European member states. The majority of cases were brought against African and South American states. (click here for a comprehensive overview of current and past ISDS cases)”

Does Schaake want to claim that cases by companies from EU member states can not derail the democratic process? Swedish investors won an ISDS case against Romania. What did Romania do wrong? Romania brought its policies in line with EU legislation. EU countries have been respondents in 117 known cases.

Covered investments

“Another critical claim is that we have seen a dramatic increase in the number of new ISDS cases, from around ten cases a year in 2000 to more than fifty in 2013. While this sounds alarming, we must see it in the context of a significant increase in global investment flows. The growing number of cases between 2000 and 2014 is directly caused by an increase of global investment stocks in the same period from 7 trillion USD to 25 USD.”

Schaake refers to the wrong numbers. Most of these investment stocks are not covered by ISDS. More adequate numbers would have been: investment stocks covered by ISDS. In addition, contrary to what Schaake writes (“directly caused”), there is no causality, as an alternative explanation is possible: the increase in the number of new ISDS cases is caused by expansive interpretation of investment protection clauses by for-profit arbitrators.

Moreover, the argument backfires. TTIP would expand covered investment stocks by far more than all existing treaties combined. (page 29)

Presently 1% of US foreign direct investment stock in the EU is covered by ISDS; this led to nine ISDS cases. Coverage of 100% of US foreign direct investment stock in the EU may lead to hundreds of cases against the EU and EU countries. Multinationals will also be able to use the agreements with Canada, Singapore or other countries, if concluded.

Contrary to what Schaake writes, the numbers are alarming.

“Many of these investments went to developing countries where there are often more concerns about the rule of law.

World stocks investment inward 1980 – 2014

There are still other problems surrounding ISDS procedures. The language used in the ISDS clauses is unclear, so that companies can bring governments before courts for a broad range of issues. Furthermore, the arbitrators are not always independent as they often work on other cases and work for both companies and governments. The procedures take place behind closed doors and documents are rarely accessible. These are valid concerns that we have been addressing in the European Parliament, and that are shared by the European Commission.

To make the needed improvements, the Commission has proposed innovations to ISDS, which would increase transparency, limit the issues which companies can sue for, protect the right and space of governments to regulate and looks to guarantee the independence of arbitrators. (click here for a link to the Commission’s proposals)”

Last summer over 110 scientists published a Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP). The statement shows the commission failed to solve a long list of issues.


“Are there any supporters of ISDS? Maybe… To make sure all voices are heard, the Commission froze the negotiations on ISDS in TTIP to hear from people. And 160.000 responded. We want to know as soon as possible what these consultations say about what stakeholders think about this new ISDS. In any case it shows people know and care about EU politics.

After all the discussion on ISDS, one may wonder, ‘are there no alternatives to ISDS?’. As a matter of fact, two alternatives have been suggested, but both are not without problems.

The first is state-to-state dispute settlement. States would then take the case of a company upon themselves, and address it before a tribunal. This creates a problem for small and medium size enterprises, which may not have the resources to convince their government that their case is worthy of attention. A second problem is that the cases might well be influenced by inter-state relations and other global events.

The second alternative is a permanent ISDS tribunal, much in the way the WTO also has a permanent tribunal for dispute settlement. This is definitely a good option, but it will probably not be put in place very soon. Therefore, while the idea is good, it will not solve the current debate.”

Local courts and insurance are two more alternatives. Both exist.


“That leaves the question, ‘why do we need this system between the EU and the US?’ Surely, the EU and the US have highly predictable and well-functioning legal systems that do not need separate rules to protect companies? Yet, businesses in both the EU and the US do not always agree. European companies question whether they would get the same treatment in Texas as a Texan company would, or the same trial in New York as their American competitor. American companies on the other hand wonder whether they would get the same treatment as local companies would in for example Italy or Romania. These are not easy questions, but we should not shy away from them.”

Adjudicative systems are not perfect. People are not perfect. But Schaake does not provide proof of systemic failures. If there would be proof of systemic failures, we would have to repair our systems. Schaake does not argue that our legal systems are beyond repair.

Let’s go one step further. There is no reason to add ISDS to an agreement with China. Companies can take a political risk insurance.

China’s investments in the EU are growing. Above I mentioned that last summer over 110 scientists published a Statement of Concern which shows that the commission failed to solve a long list of issues. We should not expose ourselves to ISDS cases. Especially not as flaws in trade agreement are hardly reversible.

“Complex facts may not always be as sexy as fast claims, but I’m afraid trade negotiations are often very technical and complex to understand. They are not the material for one-liners.

Hypes are easily born. This article from Euractiv for example, purported that the French government stated that it would not sign TTIP in 2015 and was against including ISDS in TTIP. However, this claim is incorrect if we look at the transcript from the hearing the article is based on. It is even a completely incorrect translation of a French version of the article posted on the same website.

We need to make sure that the current problems with the system are remedied in the agreements that already exist, and we must make sure that European (and other) governments retain their right to regulate. But to have that debate, we need the facts and not the fiction.”

What can I say? Schaake used incomplete numbers, referred to wrong numbers; her focus on numbers backfired. I did not see one good argument. And she overlooked the Statement of Concern, published by over 110 scientists, mentioned above.

Agreements without ISDS are not a problem. The Cato Institute is a staunch proponent of investment and free trade. It advises to purge trade agreements of ISDS. Dan Ikenson may have produced the best quote: “ISDS is ripe for exploitation by creative lawyers.

“The consultation from the European Commission will come out soon, and that will provide us with a more solid ground to weigh the pros and cons of ISDS once more, this time based on a major crowd sourced consultation, hearing the voices of people from all over Europe.”

The commission will present the results of the consultation. Will they admit they failed to solve a long list of issues? Will they admit ISDS is rigged to the advantage of the United States? The commission does not want to renegotiate the draft agreement with Canada, so they can not admit they messed up. We can not expect the truth from the commission. The commission will not fight for our democracy.

“Correction: This article was updated on 19 November to rectify an earlier version which stated that the first ISDS clause was introduced into the 1959 BIT between Germany and Pakistan, whereas in fact this agreement contains a state-to-state dispute resolution mechanism.”

Crown jewels: Separation of powers

The separation of powers is a core aspect of liberalism, of our democracy. I have noted various times, also in letters to the European Parliament International Trade committee, of which Schaake is a member, that ISDS does not observe the separation of powers and is rigged to the advantage of the United States. (letter 1, letter 2)

Schaake is the ALDE (liberal) group’s spokesperson on the trade agreement with the US. We can see her blog post as an indication of the group position.

The liberal group seems ready to sacrifice the separation of powers, and democracy, for no good reason. As things stand now, the liberals won’t fight for our democracy.

Like with ACTA, citizens will have to step in.

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FFII submission to Ombudsman consultation on openness in TTIP negotiations

Foundation for a Free information Infrastructure (FFII) submission to the European Ombudsman public consultation in relation to the transparency of the Transatlantic Trade and Investment Partnership (TTIP) negotiations.

The submission has a focus on the EU’s human rights obligations. The international human rights obligations (ICCPR and ICESCR) may be relevant for other countries as well, such as TPP countries.

FFII submission: pdf, html

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Who leaked about Juncker and Malmström fighting over ISDS?

Last week the Dutch newspaper NRC revealed a fight between Juncker and Malmström over ISDS. The article (paywall) sketched the context: uninformed activists gaining influence. The article suggested Juncker without good reason giving in.

As Juncker does not gain anything with this leak about the fight, I assume proponents of ISDS leaked, and had the ear of the reporter, so they could sketch the context. The newspaper did not give civil society a rebuttal: very bad journalism, endangering our democracy.

Vrijschrift reaction, in Dutch, the NRC did not want to publish.

See also the Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) published by over 110 scientists.

And CETA: ISDS does not observe the separation of powers

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EU Parliament promises to better register its decisions

In 2011 the FFII discovered that some European Parliament decisions regarding the ratification of the Anti-Counterfeiting Trade Agreement (ACTA) were not recorded in any known document. A hidden class of documents (“coordinators’ minutes”) seemed to exist, but the Parliament denied the existence. The FFII filed a complaint with the European Ombudsman.

The ombudsman found a systemic failure regarding the listing of documents in the Parliament’s registry of documents. In response, the Parliament took measures to better comply with EU law. However, the Parliament’s measures are limited. It did not take measures to ascertain all its documents are properly registered. Questions remain, as we will see below.

The complaint

The European Parliament has committees, which usually meet in public and produce committee minutes. Committees have coordinators to prepare the meetings. The coordinators meet behind closed doors and can take certain decisions. The FFII requested minutes of coordinators’ meetings. The Parliament denied the existence of these minutes. But if that was correct, then certain decisions were not recorded. The FFII insisted. In cases the FFII could provide proof of the existence of these minutes the Parliament released them, but it maintained that other coordinators’ minutes did not exist.

On 1 February 2012 I filed a complaint with the European Ombudsman against the European Parliament for systematically lying about the existence of documents.

The Ombudsman reformulated my complaint to: “Parliament fails to register all existing Parliament documents in its electronic Register of documents.” The ombudsman formulated as claim: “Parliament should register all existing Parliament documents in its electronic Register of documents, in particular the minutes of the meetings of Parliament Committee Coordinators.”

During the process another hidden document surfaced.

Draft decision

In its draft decision the ombudsman found a “systemic failure by Parliament to mention, in the public register of documents, the existence of a whole series of documents that relate to the work of MEPs”, found the failure to amount to an instance of maladministration, and recommended: “When minutes of meetings of Committee Coordinators are drawn up, Parliament should include the minutes in its public register of documents and make them, in principle, directly accessible, in accordance with Article 12 of Regulation 1049/2001″ (Ombudsman, paragraphs 16-18).

Note the draft decision was more limited than the original claim. As we saw above the claim stated “Parliament should register all existing Parliament documents”, the draft decision only refers to coordinators’ minutes.

Parliament answer

The Parliament stated that the recommendations or decisions adopted by the coordinators will be included in the public committee minutes.

The decision

Decision of the European Ombudsman closing the inquiry into complaint 262/2012/OV against the European Parliament:

“Parliament has taken appropriate measures to implement the Ombudsman’s draft recommendation.”

Further remark

The ombudsman added a further remark:

“In the light of Parliament’s positive reply to the draft recommendation, the Ombudsman trusts that, for the sake of consistency with its new policy adopted after the draft recommendation, Parliament will include in its public register existing minutes of meetings of Committee Coordinators adopted during the 2009-2014 parliamentary term.”

Open questions

The Parliament declared that “in principle the committee secretariats will not prepare any separate minutes of coordinators’ meetings”. What will happen if they act contrary to the principle, if they do prepare separate minutes? Will the document(s) be recorded in the register of documents?

The Legal Affairs committee made a coordinators’ workspace, accessible only to the coordinators, political advisors working with the committee on Legal Affairs and the staff of the secretariat. Are the documents in this workspace recorded in the register of documents? Are coordinators’ notes recorded in the register, or is this a hidden class of documents?

How many committees have a coordinators’ workspace? And are there any further “walled gardens” out of sight of the registry?

Update: the 2011 Legal Affairs committee coordinators’ minutes are now available at the FFII website.

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11 October action day against TTIP, CETA and TISA

This Saturday 11 October 2014, in hundreds of European cities, civil society organisations, unions and farmers will organise manifestations against EU trade agreements under negotiation.

The manifestations regard the Trade and Investment Partnership (TTIP) with the US, the Comprehensive Economic and Trade Agreement (CETA) with Canada, and the Trade in Services Agreement (TISA) with many countries.

The secret negotiations create serious risks for privacy, reform of copyright and patent law, labor rights and the environment, and may give companies excessive power in conflicts with states.

See also the Statement of Concern on investor-to-state arbitration by over 110 scholars.

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ISDS out?

OpenDemocracy reports about the back and forth confusion during Commissioner hearings recently:

At 16:01 they [Tagesspiegel] publish an article on their website: Juncker will drop ISDS from TTIP, this is the policy of the incoming Commission.

It becomes more an more likely that the controversial enforcement of TTIP and CETA with ISDS instruments would be resolved.

This would enable the public to focus more on the substance of the envisaged agreements.

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Steinbrück: Nobody knows what has been negotiated

Peer Steinbrück, Member of the Bundestag, Chair of the German-U.S. Parliamentary Friendship Group, and former German Federal Minister of Finance

Moderator: Bruce Stokes, Director of Global Economic Attitudes, Global Attitudes Project, Pew Research Center, Non-Resident Fellow, German Marshall Fund of the United States

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US PEC on Cross-Border Data Flows in TTIP and other FTA

The US President Export Council discusses its proposed data flow provisions (June 19, 2014) as a means to counter the rush to privacy protection and denounces privacy measures of foreign governments as a trade barrier and digital protectionism. No further arguments are provided to back up these claims and allegations.

.. Ginni, you warmed up earlier today over breakfast, on cross-border data flows, but why don’t you give us a summary of the second letter on cross – data border flows?

MS. ROMETTY [IBM]: Okay. Well, first, I should say that the Administration has taken a number of actions already in this area. It is both cross-data flows, cross-border data flows, as well as data localization. In fact, these are a threat not only to operation globally, but also to business globally, and, frankly, it is a threat to how governments can even operate and the benefits they get. So the past two years, both Secretary Pritzker and Ambassador Froman have been very helpful in their attempts, in their efforts here, because we have seen some successful rollback of troubling policies. I think many people are well aware of the India Preferential Market Access policy that got pulled back.

And, quite clearly, since the Snowden revelations, what has happened is you see an increase now in governments who are advocating and promoting local and digital protectionism.  Just to list some of the countries, Brazil, Turkey, Russia, Indonesia, Vietnam, Nigeria, India.

They are in the forms of cross-border or the data protection or keeping data local. Honestly, they are many times often a condition to do business there.

So while privacy and security, those are often the reasons stated for this, outright stated, this is really a form of protectionism and it is really often driven by local competition, local commercial competition.

I don’t think anyone would argue that you need data. It is the lifeblood of an economy, it is for our governments, it is for our businesses, for small and medium enterprises, as well, to succeed around the world.

While privacy and security are essential, it is just really important that we believe that any local requirements for this, it will actually just create trade barriers and do nothing for privacy and security at the end of the day.
So we would advocate that we really work together to defeat any of this digital protectionism and in the short term, please continue, the Administration,to  do what  we’ve  been doing. As  these creep up, we go work on the bilaterally, but as we spoke about earlier today with Ambassador Froman, the most important thing is to intensify the focus on all the trade agreements to be sure that they actually — that there are rules there that prohibit that and protect, that we are able to move data and not have to store data locally.
I’d  just  end  on  the  point  that this  isn’t  about a technology industry issue. This is every company’s  issue.    It  is  every company,  every  industry and, frankly, all governments, as well, and their ability to both create economic prosperity and move jobs.

CHAIRMAN McNERNEY: Yes. Taken to an extreme, it would impair our ability to conduct business globally. So threading this needle between being sensitive to local sensitivities on privacy on one hand, but not allowing agreements to wrap — local in terests to wrap themselves in that cloak to, in essence, produce a protectionist environment is what I think is the point.

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