EU Proposes New Corporate Sovereignty Court For TAFTA/TTIP; US Not Interested

from the CETA-still-a-backdoor-for-ISDS,-anyway dept

As we have reported, the most problematic aspect of the proposed TAFTA/TTIP trade agreement between the US and the EU has been the proposed corporate sovereignty chapter, formally known as investor-state dispute settlement (ISDS). The outcry over this was so great in Europe last year that the European Commission put negotiations of this topic on hold, while it carried out a public consultation on the matter -- presumably assuming that the extremely technical questions about this complex issue would kill off any further interest by the public. Instead, an unprecedented 150,000 submissions were received, 145,000 of which said get rid of ISDS completely. In response, the European Commission merely promised to try to address the many concerns raised with a new and "improved" version.

This was sketched out back in May, when the Commission suggested making the current secret tribunals more like a traditional court. Yesterday, Cecilia Malmström, the EU commissioner responsible for trade, and thus the TAFTA/TTIP negotiations, formally unveiled the European Commission's proposed replacement for traditional corporate sovereignty tribunals, which turns out to be almost identical to the first ideas presented back in May:

The proposal for the new court system includes major improvements such as:

a public Investment Court System composed of a first instance Tribunal and an Appeal Tribunal would be set up;

judgements would be made by publicly appointed judges with high qualifications, comparable to those required for the members of permanent international courts such as the International Court of Justice and the WTO Appellate Body;

the new Appeal Tribunal would be operating on similar principles to the WTO Appellate Body;

the ability of investors to take a case before the Tribunal would be precisely defined and limited to cases such as targeted discrimination on the base of gender, race or religion, or nationality, expropriation without compensation, or denial of justice;

governments' right to regulate would be enshrined and guaranteed in the provisions of the trade and investment agreements.
Although this addresses some of the more glaring faults with traditional corporate sovereignty, notably the lack of transparency, and the inability to appeal against tribunal rulings, it leaves untouched ISDS's biggest problem: the fact that it grants foreign investors unique rights to a completely separate legal system -- one unavailable to domestic companies or the public. For that reason, many organizations that were against old-style ISDS, are also against the new Investment Court System (ICS).

Even if the new ICS were perfect -- and it isn't -- it still wouldn't solve the problem of ISDS for EU citizens. Although Malmström said yesterday that the ICS approach was designed to be used in all future EU trade agreements as a replacement for the usual corporate sovereignty chapters, she admitted that was not an option in the Comprehensive Economic Trade Agreement (CETA) between Canada and the EU, saying: "we are not re-opening the CETA agreement." This confirms what we surmised in a recent post. But as Techdirt noted there, if CETA includes ISDS, US companies with subsidiaries in Canada, of which there are many, will be able to use Canada's trade agreement to by-pass TTIP's new ICS system completely, and sue EU nations indirectly, using ISDS with all its widely-recognized faults. Reforming TAFTA/TTIP's ISDS without reforming CETA's corporate sovereignty provisions is pretty pointless.

Even supporters of the new ICS are worried by this aspect. Bernd Lange is the MEP with responsibility for making recommendations on how the European Parliament (EP) should vote on international trade matters. Although he is relatively happy with the ICS solution, he has confirmed on Twitter that unless the ISDS chapter in CETA is re-negotiated, he will not recommend that the agreement with Canada is ratified when it comes to the main vote, expected in a few months' time. And without the support of his Socialists & Democrats group, CETA is unlikely to pass in the European Parliament, which would kill it completely.

Finally, there is the rather important question of whether the US will accept Malmström's new ICS. As we wrote last month, there's already some indication that the US is not prepared to move from ISDS tribunals to a new kind of open court system. That confirms an earlier dismissal of the idea by US Undersecretary for International Trade at the Commerce Department, Stefan Selig, back in May. Another indication of the US view can be found in a sharp rejection of the EU's ICS proposal by the US Chamber of Commerce, reported here by the Global Edition of the Handelsblatt newspaper:

"While we recognize the E.U. has a political problem relating to future investment treaties, the U.S. business community cannot in any way endorse today's E.U. proposal as a model for the Transatlantic Trade and Investment Partnership (TTIP)," according to Marjorie Chorlins, the chamber's vice president of European affairs.

"The recent European debate around investment treaties -- the obligations governments accept in them and the methods they provide for dispute settlement -- is not grounded in the facts, and the distortions in this debate cannot be allowed to trump sound policy," she said in a statement."
It will be interesting to see what the official US position is on the ICS idea, but those comments from the influential and well-connected US Chamber of Commerce suggest that the battle over whether corporate sovereignty should be included in TAFTA/TTIP, and in what form, is far from over.

Follow me @glynmoody on Twitter or, and +glynmoody on Google+

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Filed Under: corporate sovereignty, eu, ics, investment court system, isds, ttip

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  1. identicon
    David E.H. Smith, 18 Sep 2015 @ 2:24pm

    Suing the Global Corporate Economy.

    Suing the Global Corporate Economy. EU; Native Canadians Supporting the Endeavors of Grassroots EU?

    Another good reason for non-Native citizens of Canada, the EU, Trans Pacific nations, China, et al, to support Native Canadians in; Ending the Deprivation of the Due Diligence Treaty Information, Ending Toxic Pollution, Prohibiting Fracking & Accessing Hazardous Natural Resources, Reconciling the Abuses of The Residential Schools (& its subsequent cover-up & ‘Inquiry’), Ending the ‘Designer Racism’, ‘Moving Political talks’ along, the Investigation into Missing Native Women, et al…

    Native Canadians can Save Non-Natives Canadians, et al, from Corporate Canada’s superseding TTIP, CETA, TPP, C-CIT & other Global Corporate Treaties/'Arrangements'?

    But, Under what Circumstances would Native Canadians consider helping non-Native Canadians, et al, to Co-Sue the Federal Government & Corporate Canada, et al, for Deprivation of Due Diligence Info, besides Ending the ‘Designer Racism’ & other considerations? Non-Natives Canadians, et al, can learn a Great Deal about the Need for Litigation against Corporate Canada & its Representatives in Parliament & Congress.

    While the decision to cancel the license to access & pollute a huge amount of water used for fracking by Nexen’s Chinese & Canadian investors may be good for the citizens of the Fort Nelson First Nation, the context of the decision is still unsettled & dangerous for both; Native & non-Native Canadians.

    This is the second ‘set-back’ for Corporate Canada’s investors in China’s corporate energy participant, Nexen, in the China – Canada Investment Treaty (C-CIT) whereby Corporate Canada & the government of Canada (PM Harper & the executives of the ‘opposition’ parties) have sold, &/or, deliberately misrepresented to China & other potential signatories of the flurry of Global Corporate Treaties/’Arrangements’; CETA (EU), TPP (Trans Pacific nations) &, by association, the TTIP (U.S – EU), on the basis of unrealistic expectations regarding Corporate Canada’s ability to control;
    Native politicians & Native voters in order accept unofficial (non-government, or, non-legal, sanctioned fines, &/or, awards) pay –offs
    Non-Native Canadians by way of fanning the flames of the uniquely Canadian ‘designer racism’.

    As all of Corporate Canada’s traditional parties (minus the Green party) support the secret Tribunals’ ‘arrangements’, Corporates China & Canada are desperate to avoid having the secret Tribunal of the C-CITreaty financially punish the taxpaying voters prior to the federal election. Corporate Canada is even more desperate to make sure that the decision by the post-election Tribunal deciding in favor of the Chinese & Canadian investors will not:
    tip-off the Canadian voters & cause the voters to reject the yet to be ratified TPP & CETA
    &, perhaps more importantly,
    tip-off the voters in the U.S., the European Union, the Trans Pacific nations, et al.
    And, finally, the Nexen investors have to wait until after the Canadian Oct., 2015 election in order for the faux ‘opposition’ to put some distance between itself & those ‘evil followers of Harper’ (ie. the Conservatives), even though they, the faux ‘opposition’ (the Liberals & the New Democrats), are also supporters of the means to inhumanely & secretly punish the ‘harmless’ voters, both; Native & non-Native, of Canada.

    And, if one understands why President G.H.W. Bush explained to Canadians ‘Well, you should have Known’* regarding Corporate ‘America’s’ (ie. Canadian investors, et al, in American companies doing business in Canada) reneging on the FTA as per the soft lumber ‘dispute’, then perhaps one might understand why Presidents Bush, Obama, et al, might very well say the same thing to his fellow American voters & the voters in all of the other potential signatory nations.

    And, while some** have concluded that Corporate Canada’s ‘handling’ of grassroots Canadians, particularly, Native Canadians, continues to be repugnant, it may be worthwhile to point out that while grassroots Canadians have been conditioned/educated to defer to government imposed ‘compromises’ & to be reluctant to engage in legal battles, ie.‘suit-adverse’, as opposed to litigious Americans, Native Canadians have wisely & successfully determined that litigation is the only way to get around the secret arrangements that benefit a few band members for the period of an election cycle by engaging in litigation that benefit the entire community by questioning, testing, buttressing & furthering the rights of Native Canadians.

    And, while non-Native Canadians do not have the benefit of having the financial & institutional capabilities to sue Corporate Canada & the government of Canada, grassroots non-Native Canadians may find a vast common ground with Native Canadians, whereby Native & non-Native Canadians can exercise & increase the benefits of their version of ‘democracy’ by establishing effective means of checks & balances over the combined forces of Corporate Canada & the representatives that they choose for the voters to select as Members of Parliament. One of the means for accessing the aforementioned checks & balances arises from creating the forums for all Canadians, et al, to share, improve & discuss, etc., the information & the questions in The W.A.D. Accord*** (also referred to as ‘The Australian Question’) which is intended to prevent Native & non-Native Canadians, et al, from continuing to be deprived of the due diligence information that can provide the basis for the more informed financial planning of their families & communities.

    Therefore, by looking at the context of the decision to turn down Nexen’s fracking license one can get a better understanding of why Corporate Canada has anxiously help develop the aforementioned Treaties/’Arrangements’ that would supersede the benefits in The WAD Accord & its Compensation while continuing to deprive & now, after the ratifications, legitimize Native & non-Native Canadians, et al, of the information in the Treaties/’Arrangements’ & legitimizing (ie. making it legal for Corporate Canada &/or its Associates to make any & all secret, self-serving arrangements in the future).

    David E.H. Smith
    - Researcher
    - 'Qui tam...'

    *see; ‘Well, you should have Known’ at
    ** Who is the ‘coveted’ Chinese investor who stated:
    ‘When it comes to dealing with Canadians (Corporate Canada & their politicians?) it’s not that we are not racist, we just can’t stand the way that you suck up to us’.
    And, which Canadians are coveting this potential Chinese investor & his global associates?
    ***The W.A.D. Accord, see; Google, or,
    Also, see; 'The Submission' to The SUPREME COURT of CANADA:
    ‘The SHAREHOLDERS & Corporations of AMERICA, China, Canada, the EU, the Trans
    Pacific nations, et al
    the (harmless) Canadian NON shareholders, both; Native & non Native, et al’
    'The MERKEL (Chancellor of Germany) Letter; To Sue, or, Be Sued?'
    FULL Article, see; Reader Supported News; David E.H. Smith

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