Positions on investor-to-state dispute settlement

Dutch newspaper De Volkskrant today opens with an article on investor-state dispute settlement (ISDS), stating that ISDS can have far-reaching effects on EU environmental laws. De Volkskrant writes it has a leaked draft of the EU – Canada trade agreement.

Jan Kleinheisterkamp of the London School of Economics says the concerns about ISDS are not unrealistic. He points to the Vattenfall – Germany case, involving a 3.7 billion euro claim against Germany.

Judith Merkies, MEP, S&D, says ISDS compromises the member states sovereignty.

Marietje Schaake, MEP (ALDE) finds the critique understandable, investment funds can fight, delay or influence new laws. But, she says, the critique shouldn’t be exaggerated. ISDS creates guarantees for companies and can help to stimulate investments.

I find Schaake’s position rather problematic. There are serious concerns that ISDS may undermine democracy and our ability to regulate for the public interest. This may be a defining moment. Just stating that concerns shouldn’t be exaggerated is too simple. And Brazil, the country attracting most foreign investments, does not sign ISDS clauses. Schaake’s reasoning fails.

According to De Volkskrant, the Netherlands is in favor of including ISDS in trade agreements, while Germany and France would show some hesitations.

See also:

Vrijschrift Foundation rejects EU – US trade mandate http://acta.ffii.org/?p=1903

Update:

See also: A Response To The Critics Of “Profiting From Injustice” http://kluwerarbitrationblog.com/blog/2013/01/02/a-response-to-the-critics-of-profiting-from-injustice/

The right to say no – EU-Canada trade agreement threatens fracking bans
http://www.tni.org/briefing/right-say-no

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Vrijschrift Foundation rejects EU – US trade mandate

The EU draft mandate for trade negotiations with the United States contains serious flaws and should rejected, according to the Vrijschrift Foundation. Vrijschrift writes this in a letter to the Chairman of the Dutch House Committee for Foreign Trade and Development Cooperation, Mr de Roon.

The EU Member States are expected to grant the European Commission a mandate for trade negotiations with the United States in June. On Thursday, June 6th, the Dutch House Committee for Foreign Trade and Development Cooperation will formulate its opinion.

Openness

Vrijschrift notes that the draft mandate allows the European Commission to refuse citizens, civil society organizations, EU member states governments and national parliaments access to draft texts. This will result in (foreign) companies having better access to information about the negotiations. This creates a significant risk that the negotiations will lead to a substandard and unbalanced result, according to Vrijschrift.

Human Rights

The draft mandate proposes to include a reference to human rights in the non-binding preamble of the trade agreement. This offers insufficient protection for human rights, according Vrijschrift.

Democracy

The draft mandate also includes international “investor-to-state” arbitration. This means that (foreign) companies can demand from the EU and Dutch taxpayers high damages if changes in laws may lead to lower profits than expected. These arbitration panels are placed above the supreme courts of the Netherlands, the EU and the U.S. Multinationals can use billion euro claims to stop law changes in order to protect old or even harmful business models. This threatens the sovereignty of our constitutional democracy and the primacy of the parliament. For instance when pharmaceutical companies disagree with health policies. Or when the tobacco industry suffers damage from a successful anti-smoking policy. Thus, companies acquire state powers.

The draft mandate notes that the trade agreement should be without prejudice to the right of the EU and the Member States to adopt and enforce measures necessary to pursue legitimate public policy objectives. But the draft mandate proposes to leave the decision whether laws are lawful to external arbitration tribunals, whose composition in practice is incomparable to that of a judiciary as we know it. This is a fundamental design flaw, according to Vrijschrift.

Vrijschrift notes: “The decision whether legislation is lawful, is a constitutional decision. Granting private interests constitutional powers undermines our democracy. The euro currency contains design flaws, this puts the EU at risk. The desire to boost the EU with a trade agreement with the US is perfectly understandable. We understand the urgency. But a trade agreement with fundamental design flaws will limit policy space too much – a price we can not afford to pay, especially not in times of crisis.”

Vrijschrift considers that the draft mandate needs major improvements regarding openness and human rights, and that there is no room for investor-to-state arbitration in a democratic society.

Vrijschrift letter to the Chairman of the Dutch House Committee for Foreign Trade and Development Cooperation, Mr de Roon (in Dutch)
https://people.vrijschrift.org/~ante/ttip/Vrijschrift-Commissie-BuHaOs-2013-05-31.pdf

Vrijschrift blog,
https://www.vrijschrift.org/serendipity/index.php?/archives/150-Vrijschrift-wijst-mandaat-voor-onderhandelingen-met-Verenigde-Staten-over-handelsverdrag-af.html

Draft mandate, Presidency compromise proposal, 21 May 2013,
https://netzpolitik.org/2013/leak-aktueller-entwurf-des-verhandlungsmandates-zum-eu-usa-freihandelsabkommen/

Democracy Center, 2013, Unfair, Unsustainable, and Under the Radar – How Corporations use Global Investment Rules to Undermine A Sustainable Future,
http://democracyctr.org/new-report-unfair-unsustainable-and-under-the-radar/

Kelsey and Wallach, 2012, “Investor-State” Disputes in Trade Pacts Threaten Fundamental Principles of National Judicial Systems,
http://tpplegal.files.wordpress.com/2012/05/isds-domestic-legal-process-background-brief.pdf

NGOs, 2013, European, Canadian and Quebec organizations, Transatlantic Statement Opposing Excessive Corporate Rights (Investor – State Dispute Settlement) in the EU – Canada Comprehensive Economic and Trade Agreement (CETA),
http://tradejustice.ca/pdfs/Transatlantic%20Statement%20on%20Investor%20Rights%20in%20CETA.pdf

Vrijschrift, 2013, CETA-verdrag bedreigt internet, gezondheid en democratie,
https://www.vrijschrift.org/serendipity/index.php?/archives/146-CETA-verdrag-bedreigt-internet,-gezondheid-en-democratie.html

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European Parliament votes for fake openness in TTIP / TAFTA

(Updated) The European Parliament adopted a resolution on EU trade and investment negotiations with the United States of America. All amendments to the resolution were rejected, and with this all amendments were rejected that asked for real openness, or asked for leaving investor to state dispute settlement out, or would have made an improvement on the paragraph on intellectual property rights.

This is a bad development. The United States informs companies and business associations. The Commission gives more information to companies and business associations than to citizens. This creates a real risk that the negotiations will lead to a substandard and biased result.

See also:
TAFTA: First Step Towards a Super-ACTA
https://www.laquadrature.net/en/tafta-first-step-towards-a-super-acta

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Pre vote blog:
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The draft European Parliament resolution on EU trade and investment negotiations with the United States of America aims for fake openness. Paragraph 21 of the draft resolution recalls the need for continuous and transparent engagement by the Commission with a wide range of stakeholders. I have visited some Civil Society Dialogues organised by the Commission. The Commission just states there are no problems and, sorry, as trade negotiations are secret, they can give no details. A masochist may find such meetings rewarding.

Civil society organisations want access to draft negotiation texts, at least for regulatory aspects. Companies have access, the Commission discriminates against citizens, while access is a human right. See the FFII letter to European Parliament Trade committee; see also KEI comments.

The fake openness paragraph comes from a compromise amendment in the International Trade committee, supported by a majority of groups in the parliament.

Real openness is an uphill battle. There are some amendments stressing the need for real openness (for instance amendments 10, 22, 26, and 36 and 37).

(See the parliament’s info page, at the bottom, subject: Trade, click show amendments.)

Investor to state dispute settlement

Investor to state dispute settlement creates a real risk to democracy, human rights, the public interest and our ability to solve financial crises. See the FFII letter to European Parliament Trade committee.

Some amendments call on the Council to exclude investor-to-state dispute settlement from the negotiating mandate (amendments 15, 21 and 29).

Copyright and patents

Paragraph 12 of the draft resolution stresses that intellectual property is one of the driving forces of innovation and creation and a pillar of the knowledge-based economy. It fails to stress that exclusive rights on knowledge and culture also hamper access to knowledge and culture, health, food security, innovation and diffusion of green technology. It fails to stress that limitations and exceptions to exclusive rights are essential for innovation. Paragraph 12 also stresses that the agreement should include strong protection of precisely and clearly defined areas of intellectual property rights, but does not define which areas. Amendment 30 offers (some) improvement.

Debate Wednesday (point 92) afternoon or evening, vote Thursday noon.

Citizens may like to contact their MEP on these and other issues.

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Think twice before signing investor to state dispute settlement treaties

If countries do not want to defend themselves in investor to state dispute settlement (ISDR) cases, they better think twice before signing them, Mr H. Lee-Makiyama said yesterday. In that case, they better also think twice before giving the Commission a mandate to negotiate a trade agreement with the US, as they may not have a veto on the outcome.

Mr Lee-Makiyama, director of the European Centre for International Political Economy, was a panelist at member of European Parliament Marietje Schaake’s event “What role for intellectual property rights in the Transatlantic Trade and Investment Partnership“. (TTIP)

He said that trade agreements are not civil law, and should not be read as civil law. There is no country in the world that respects all rules in trade agreements, including the EU, he said.

Investor to state dispute settlement cases are decided by lawyers, who interpret international agreements as contracts. Could the rise in ISDR cases be related to interpreting agreements much stricter than they were ever meant? There is a goldmine for lawyers and adventurers then.

I asked Mr Lee-Makiyama whether ISDR is a game changer in the interpretation of international agreements. After giving some historical background, he said countries better think twice before signing investor to state dispute settlement treaties.

As noted earlier, the member states of the EU may not have a veto on the proposed trade agreement with the US, they may like to think twice before giving the Commission a mandate to negotiate.

Mr B. Hugenholtz (director of IvIR) said that intellectual property rights are not primarily a trade issue and that the most important reason not to include intellectual property rights in the trade agreement with the US is that it will lock in our societies, blocking reform.

Mr R. Schlegelmilch (Commission, DG Trade) said the Commission does not want copyright rules in the agreement, but only enforcement practice. In response, Raegan MacDonald from Access noted that in ACTA privatised enforcement practice was one of the most controversial issues.

Mr Schlegelmilch said the EU and the US will negotiate the agreement in secret because that is more easy.

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TTIP / TAFTA: Meaningful or fake transparency?

Mr Daniel Caspary, European People’s Party (EPP) coordinator International Trade Committee, said this morning that looking at draft negotiation texts does not make any sense.

This morning the EPP group in the European Parliament organised a breakfast debate on the proposed trade agreement with the US (TTIP / TAFTA).

The most interesting remark was about transparency. Many speakers at the meeting pointed out transparency is essential as the agreement involves regulatory convergence (may change our laws). Many speakers called for the timely publication of negotiation texts.

Organising MEP Caspary then said in his closing remarks that after doing it several times he realised that it does not make any sense to look at draft negotiation texts as they are living and changing all the time. He wants to discuss, at a later meeting, how transparency is delivered.

It doesn’t make any sense to look at texts? We are only to listen to the Commission saying what the negotiations are about?

With the software patents directive the Commission told us it was only about computer implemented inventions, not about software patents. Looking at the text, we knew that was not true.

With ACTA, the Commission said the criminal measures were only for commercial scale infringements. Looking at the text we saw that the definition of commercial scale was outrageous.

Looking at texts is essential.

Next week the European Parliament will debate and vote on a resolution on the trade agreement. Will the parliament follow the EPP, and only ask for fake transparency? Or will the parliament adopt a meaningful amendment on transparency? It will be an essential vote.

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Investor – state dispute settlement not compatible with EU Treaties

In this blog post I will argue that investor – state dispute settlement (ISDS) is not compatible with the EU Treaties.

Summary: EU laws have to be compatible with the EU Treaties (including human rights). International agreements do not change this, EU laws implementing international agreements have to be compatible with the EU Treaties as well. The EU Treaties establish a complete system of legal remedies and procedures, the EU Court of Justice (ECJ) has exclusive competence to review the lawfulness of EU acts. Investor – state dispute settlement creates a parallel track. It falls outside the complete system of legal remedies established by the EU Treaties and conflicts with the ECJ’s exclusive competence. Investor – state dispute settlement is not compatible with the EU Treaties, it undermines the very foundations of the Union.

Investor – state dispute settlement

Investor – state dispute settlement clauses in international agreements give multinationals the right to sue states for international arbitration tribunals and demand high damages. In recent years, arbitration tribunals increasingly stretched the concept of expropriation. Multinationals can now sue states if legislative changes may make their profits lower than expected, even if the legislative changes are needed for the public interest, like protecting health. This puts pressure on the democratic process and the public interest.

International tribunals above high courts

Tobacco company Philip Morris sued Australia over the Tobacco Plain Packaging Bill, which introduced restrictions on the use of cigarette company’s logos on cigarette packets and allow for more space for health warnings. After Australia’s High Court dismissed the legal challenge, Philip Morris launched an investor-state case, bypassing Australia’s High Court. As a result, Australia decided not to sign treaties with investor-state arbitration clauses any more.

Using investor – state dispute settlement to bypass local courts, including the highest court, raises the question whether the EU Treaties allow arbitration to bypass the European Court of Justice when it comes to the interpretation of the EU Treaties.

ECJ case law: Kadi et al

The Treaties establish a complete system of legal remedies and procedures, the lawfulness of EU acts is for the Court to review. Some quotes from Joint Cases C-402/05 P, Kadi et al, and C-415/05 P (emphasis added).

In paragraph 281 the Court considers that “it is to be borne in mind that the Community is based on the rule of law, inasmuch as neither its Member States nor its institutions can avoid review of the conformity of their acts with the basic constitutional charter, the EC Treaty, which established a complete system of legal remedies and procedures designed to enable the Court of Justice to review the legality of acts of the institutions (Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraph 23).”

In paragraph 282 the Court recalls “that an international agreement cannot affect the allocation of powers fixed by the Treaties or, consequently, the autonomy of the Community legal system, observance of which is ensured by the Court by virtue of the exclusive jurisdiction conferred on it by Article 220 EC, jurisdiction that the Court has, moreover, already held to form part of the very foundations of the Community (see, to that effect, Opinion 1/91 [1991] ECR I‑6079, paragraphs 35 and 71, and Case C-459/03 Commission v Ireland [2006] ECR I‑4635, paragraph 123 and case-law cited).”

In paragraphs 283 and 284 the Court considers that fundamental rights form an integral part of the general principles of law and that respect for human rights is a condition of the lawfulness of Community acts.

In paragraph 285 the Court considers: “It follows from all those considerations that the obligations imposed by an international agreement cannot have the effect of prejudicing the constitutional principles of the EC Treaty, which include the principle that all Community acts must respect fundamental rights, that respect constituting a condition of their lawfulness which it is for the Court to review in the framework of the complete system of legal remedies established by the Treaty.”

ISDS outside the complete system of legal remedies and procedures

Investor – state dispute settlement falls outside the complete system of legal remedies and procedures established by the EU Treaties. Arbitration tribunals will not request the ECJ preliminary rulings on the interpretation of Union law or on the validity of acts adopted by the institutions. They will decide themselves on the validity of acts adopted by the institutions. The ECJ and arbitration tribunals may reach different conclusions.

An investor may dislike EU legislation safeguarding a human right, say access to medicine, and state that it is not compatible with an international agreement ratified by the EU. The ECJ may consider that the international agreement can not take away the Union’s legislative space to safeguard human rights and dismiss the legal challenge.

The investor may then launch an investor – EU case. The tribunals may assume jurisdiction without taking into consideration the compatibility of investor-state arbitration with EU law. (Compare: Olivet, C, 2013) International arbitrators are not ordinarily well versed in human rights. (Kelsey and Wallach, 2012). The arbitration tribunal may find the EU law safeguarding a human right not compatible with the trade agreement. The decisions conflict.

Investor – state dispute settlement undermines the autonomy of the Union’s legal system, the ECJ’s exclusive jurisdiction – a very foundation of the Union (compare paragraph 282 ECJ case Kadi et al, quoted above).

ECJ, Joint Cases C-402/05 P, Kadi et al, and C-415/05 P, 2008,
http://curia.europa.eu/juris/document/document.jsf?text=&docid=67611&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1560491

Kelsey and Wallach, 2012, “Investor-State” Disputes in Trade Pacts Threaten Fundamental Principles of National Judicial Systems,
http://tpplegal.files.wordpress.com/2012/05/isds-domestic-legal-process-background-brief.pdf

Olivet, C, Transnational Institute, 2013, A test for European solidarity – The case of intra-EU Bilateral Investment Treaties http://www.tni.org/briefing/intra-eu-bilateral-investment-treaties-test-european-solidarity?context=70931

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EU member states may not have a veto on TTIP / TAFTA

After the negotiations, the EU member states may not have a veto on the proposed trade agreement with the US (TTIP / TAFTA).

I wrote earlier about some issues with the EU draft mandate for the EU – US trade agreement.

In addition, I note that the draft TTIP mandate (pdf) does not mention criminal measures. Criminal measures were the reason that the EU member states had a veto on ACTA (Anti-Counterfeiting Trade Agreement). With ACTA, the member states negotiated the criminal measures. After the negotiations, the Commission proposed ACTA as a mixed agreement to Council and Parliament. A mixed agreement has to be ratified by the EU and the member states. This gives the national parliaments a strong position.

The draft TTIP / TAFTA mandate notes about the negotiations that the Commission will negotiate, in consultation with the member states in the appropriate committee of the Council. No role for the member states in the negotiations itself.

The consequence of this approach is that the Commission may, after the negotiations, exercise its competence, and make an EU only proposal for adoption by the Council (after consent by the Parliament). The Council shall decide with a qualified majority to ratify. No member states ratification is needed, no strong role for national parliaments.

Basically, if the Commission negotiates some goodies for the German industry, and some goodies for some other big EU member states (having most votes in Council and Parliament), a majority for the proposed agreement is as good as certain, however bad it may be for the interests of smaller EU member states, for the public interest, democracy, access to medicine and human rights.

The mandate is very broad. If the Council authorises the Commission to negotiate, the smaller member states will have lost their grip on the outcome. They may like to take a good look at the mandate.

Unanimity

Mixed agreements have to be ratified by the EU and the member states, this gives national parliaments a strong position. They can crash an agreement by refusing to ratify. There is also an other kind of veto, but weaker.

The Council decides by qualified majority. There are some exceptions for which unanimity in the Council is needed, see art 207 TFEU. While this implies a veto too, it is a less strong veto than the one a mixed agreement gives, as unanimity regards only limited areas, can be contested and a government may not listen to its parliament (may put a resolution aside) and vote in favour of an agreement in the Council even if its parliament is against it. (We saw such betrayal of national parliaments during the software patents directive proposal procedure.)

Article 207(4):

“For the negotiation and conclusion of the agreements referred to in paragraph 3, the Council shall act by a qualified majority.

For the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, as well as foreign direct investment, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules.

The Council shall also act unanimously for the negotiation and conclusion of agreements:

(a)in the field of trade in cultural and audiovisual services, where these agreements risk prejudicing the Union’s cultural and linguistic diversity;

(b)in the field of trade in social, education and health services, where these agreements risk seriously disturbing the national organisation of such services and prejudicing the responsibility of Member States to deliver them.

The exceptions for which unanimity is needed regard the cultural exception (“cultural diversity” in the Treaties) France is concerned about. They also regard social, education and health services, but there may be a high threshold for unanimity (“risk seriously disturbing the national organisation of such services and prejudicing the responsibility of Member States to deliver them”). Regarding “commercial aspects of intellectual property”, that is not applicable here, as internal IP rules are normally adopted by qualified majority. The unanimity exceptions (TFEU 118 language arrangements and TFEU 262 confer jurisdiction) will not be part of the TTIP.

(I leave trade in services and foreign direct investment to others.)

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EP trade committee rejects meaningful TTIP amendments

Today the European Parliament International Trade committee voted on a draft resolution on the EU – US trade agreement (TTIP / TAFTA). La Quadrature du Net summarizes it: EU Parliament Opens The Door to Copyright Repression in TAFTA.

The INTA committee could have voted meaningful amendments into the draft resolution, but declined to do that.

Intellectual property

The committee adopted this compromise amendment:

“Stresses that intellectual property is one of the driving forces of innovation and creation and a pillar of the knowledge-based economy and that the agreement should include strong protection of precisely and clearly defined areas of intellectual property rights (IPR), including geographical indications, and be consistent with international agreements; believes that other areas of divergence in IPR should be solved in line with international standards of protection;”

The words “precisely and clearly defined areas of intellectual property rights” came from an amendment proposed by Marietje Schaake and Metin Kazak. The clearly defined areas are still to be defined…

Schaake had proposed (some with other members of parliament) more amendments, which would have given guidance for the defining of areas. For instance amendment 121:

“11a. Stresses that given the rejection of the Anti-Counterfeiting Trade Agreement (ACTA), prompted by concerns about restrictions on digital freedoms and the open internet, online copyright enforcement, as well as intermediary liability, these measures should not be included or aimed at in the TTIP agreement, neither by explicitly binding provisions nor by introducing or committing to restrictive interpretation or implementation of relevant EU law;”

But those amendments didn’t make it, “precisely and clearly defined areas of intellectual property rights” ended up empty.

Openness

What happened with openness? Marietje Schaake and Metin Kazak proposed (amendment 176):

“15. Recalls the need for continuous transparency, engagement with the stakeholders, including business, environmental, consumer, labour, civil liberties and other representatives, throughout the negotiation process, in order to ensure fact-based discussions, proportionate input from various sides and to foster public support;”

Continuous transparency (…) throughout the negotiation process, that is meaningful. Schaake and Kazak seem to have considered that there was no chance that the amendment would be adopted, they settled for compromise amendment 16:

“Recalls the need for pro-active outreach and continuous and transparent engagement by the Commission with a wide range of stakeholders, including business, environmental, agricultural, consumer, labour and other representatives, throughout the negotiation process, in order to ensure fact-based discussions, build trust in the negotiations, obtain proportionate input from various sides and foster public support by taking stakeholders’ concerns into consideration; encourages all stakeholders to actively participate and put forward initiatives and information relevant to the negotiations;”

Continuous transparency (…) throughout the negotiation process became transparent engagement by the Commission with a wide range of stakeholders. Here only the engagement by the Commission has to be transparent, that is meaningless…

Thanks to La Quadrature du Net for sharing the compromise amendments (not published by the European Parliament) and the voting results with me. As the voting lists are not made public, the votes are very hard to follow, and as the compromise amendments are not published, the votes are impossible to follow.

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FFII letter to European Parliament Trade committee on agreement with US

Today the FFII sent a letter to the European Parliament committee on International Trade. Thursday 25 April 2013 the committee will vote on 198 amendments to a draft resolution on the EU – US trade agreement (TTIP / TAFTA)

Text as pdf, or below:

22 April 2013

Dear Members of the International Trade committee,

We are writing to express our concerns with the proposed trade agreement with the US (TTIP). We invite you to take our concerns into account when voting on the amendments to the draft resolution on the TTIP.

In this letter we argue that citizens have a right to openness; that all measures in the agreement have to fully respect our rights enshrined in human rights instruments, including the UN International Covenant on Economic, Social and Cultural Rights; that the agreement has to exclude intellectual property rights; and that the Parliament has to step in and defend democracy and the Treaties by excluding investor to state dispute settlement from the agreement.

Openness

The agreement will mostly attempt to deeply integrate EU and US laws, as the trade tariffs between the EU and US are already low. In our opinion, a deep integration of laws has to take place in public. Negotiations in international organisations show that openness is possible. Citizens have a right to openness. Everyone has the right “to take part freely in an active and informed way, and without discrimination, in any important decision-making process that may have an impact on his or her way of life and on his or her rights under article 15, paragraph 1 (a)” of the International Covenant on Economic, Social and Cultural Rights. (ECOSOC, 2009)

Companies will have access to the draft texts. In the US hundreds of advisors, many of them corporate lobbyists, are considered cleared advisors. They have access to negotiation documents. (FFII, 2009) The EU does not have an official way of informing companies, but it happens in an unofficial way. (CEO, 2011) The EU can not allow discrimination, which will also create a real risk that the negotiations will lead to a biased result.

Human rights

According to a leaked version of the Commission’s draft mandate, (IUST, 2013) the preamble of the agreement will refer to shared values in such areas as human rights, fundamental freedoms, democracy and the rule of law. In our opinion, this is not a sufficient safeguard, as the preamble will not be binding. It is also unclear which values are shared. For instance, all EU member states have ratified the UN International Covenant on Economic, Social and Cultural Rights, while the US did not ratify this covenant. (EP, 2013) Furthermore, regarding human rights, European courts give a wide margin of appreciation to the domestic authorities. The courts only step in and protect human rights in severe cases. If the EU trades away our rights, we are only partially protected. To protect our human rights, all measures in the agreement will have to be balanced themselves. All of them have to fully respect our rights enshrined in human rights instruments, including the UN International Covenant on Economic,
Social and Cultural Rights.

Intellectual property

There is a deep divide in our societies over intellectual property rights. Exclusive rights on knowledge and culture harm access to knowledge and culture. This threatens health, food security and diffusion of green technology. Furthermore, before people had computers, it took an effort to infringe copyright; now, a mouse click is often enough. The internet made all of us infringers, this threatens our civil rights. It is essential to rethink copyright. In the software field, all developers may be infringers, as there are many trivial and over broad patents. It is also essential to rethink patent law. Trade agreements are not the right forum for this. The agreement has to exclude intellectual property rights, see the declaration signed by over 45 organisations: IP out of TAFTA. (PC, 2013)

Investor to state dispute settlement

An investor to state dispute settlement mechanism would create international arbitration tribunals above our high court and our human rights court. Multinationals will be able to sue the EU and its member states before such tribunals if changes in law threaten to make their profits lower. This would create a real risk to democracy, human rights, the public interest and our ability to solve financial crises. (Kelsey and Wallach, 2012; NGOs, 2013; Stiglitz, 2011) Both the EU and the US have strong protection for property, there is no need for international arbitration tribunals.

The leaked version of the Commission’s draft mandate rightfully notes that the agreement should not harm the EU’s and member states’ right to adopt measures necessary to pursue legitimate public policy objectives. But the Commission does not draw the logical conclusion that arbitration tribunals should not be the forums to decide whether the EU’s policy objectives are legitimate. In fact, the Commission wants to grant these ad hoc tribunals the power to take such essential decisions regarding the competence of the EU, decisions which are in essence constitutional decisions. The Commission’s proposal would create, without a change of the Treaties, ad hoc parallel constitutional tribunals, without a possibility to appeal to the EU Court of Justice – the Union’s “constitutional” court. It would be a “coup d’état” against the Union, on behalf of multinationals. In our opinion, the Parliament has to step in and defend democracy and the Treaties by excluding investor to state dispute settlement from the agreement. Disagreement with the US over the interpretation of a ratified agreement can be solved by carefully designed state to state dispute settlement.

Yours sincerely,

Ante Wessels

Foundation for a Free Information Infrastructure (FFII)

References

CEO (2011), http://corporateeurope.org/sites/default/files/attachments/lawsuit_backgrounder.pdf

ECOSOC (2009), Committee on Economic, Social and Cultural Rights, General comment No. 21, Right of everyone to take part in cultural life (art. 15, para. 1 (a), of the International Covenant on Economic, Social and Cultural Rights), E/C.12/GC/21, http://www2.ohchr.org/english/bodies/cescr/comments.htm

EP (2013), Question for written answer http://icg.greens-efa.eu/pipermail/hub/2013-March/000047.html

FFII (2009) http://action.ffii.org/acta/Analysis?action=AttachFile&do=get&target=FFII-Ombudsman-06-2009.pdf

IUST (2013), http://www.s2bnetwork.org/fileadmin/dateien/downloads/EU_Draft_Mandate_-_Inside_US_Trade.pdf

Kelsey and Wallach, 2012, “Investor-State” Disputes in Trade Pacts Threaten Fundamental Principles of National Judicial Systems, http://tpplegal.files.wordpress.com/2012/05/isds-domestic-legal-process-background-brief.pdf

NGOs, 2013, European, Canadian and Quebec organizations, Transatlantic Statement Opposing Excessive Corporate Rights (Investor – State Dispute Settlement) in the EU – Canada Comprehensive Economic and Trade Agreement (CETA) http://tradejustice.ca/pdfs/Transatlantic%20Statement%20on%20Investor%20Rights%20in%20CETA.pdf

PC (2013), http://www.citizen.org/IP-out-of-TAFTA

Stiglitz, 2011, Capital restrictions letter to US administration, http://www.ase.tufts.edu/gdae/policy_research/CapCtrlsLetter.pdf

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198 amendments to European Parliament TTIP / TAFTA resolution

25 April at 10 am, the European Parliament International Trade committee will vote on a draft resolution on the proposed EU – US trade agreement (TAFTA / TTIP). There are 198 amendments, on many subjects, like intellectual property out (especially from amendment 114), others aim at stronger IP, investor – state dispute resolution out (amendments 163, 164), more transparency. Some mention ACTA.

http://www.europarl.europa.eu/meetdocs/2009_2014/organes/inta/inta_20130424_0900.htm
agenda at the top, amendments at the bottom.

See also Issues with EU draft mandate for the EU – US trade agreement
http://acta.ffii.org/?p=1773

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