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EU Considering Waiving ISDS from TTIP?

Posted October 24, 2014

A report in a German paper this week citing an internal document from the European Commission’s Directorate General for Trade (DG Trade) to the newly appointed EU Trade Commissioner Cecilia Malmström has fueled speculation that the EU may be considering jettisoning the controversial Investor State Dispute Settlement (ISDS) provision from the free trade deal currently being negotiated with the U.S.
The letter from DG Trade outlining the most significant challenges facing the incoming Trade Commissioner is quoted by the German paper Handelsblatt, as stating that regulation of the ISDS, “is one of the most important decisions to be taken in the near future.”  Dropping the ISDS from its negotiating mandate would, the letter suggests, “be the strongest measure to confront the anti-TTIP campaign, to start a new kind of communication and to show that the Commission will respond to the public.”

However, the letter also says that “there is no easy way out of the existing situation” and warns that if the EU was to take investor protection off the table, “The United States could make us pay for it in the negotiations.”  Such a move would also be detrimental in the long-term to future trade negotiations involving foreign investment and ISDS with other countries such as China, the letter goes on to note.

Proponents of the ISDS, such as Kurt Lauk, president of the Economic Council, a business-based advisory group to Angela Merkel’s conservative Christian Democratic Party, reacted sharply to the news that investor protections might possibly be omitted from TTIP, peremptorily blasting Malmström for “capitulating” to the “unfounded hysteria of the anti-TTIP campaign” rather than “explaining to citizens why a good investment protection agreement is necessary.”