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European Parliament Approves Continuation of Free Trade Talks

Posted July 09, 2015

After months of fighting, the European Parliament yesterday voted overwhelmingly in support of a mandate for continuation of negotiations regarding the Transatlantic Trade and Investment Partnership (TTIP), a comprehensive trade agreement between the European Union’s 28 member states and the USA.

With 436 members in favour and 241 against, Parliament adopted a resolution that gives its blessing to future trade talks conducted by the EU Commission and the U.S. Trade Representative. MEPs also passed another resolution 447-229 green-lighting a revamped version of the hotly debated investor-state dispute settlement (ISDS) mechanism, which has been a lightning rod for much the opposition to the deal from a range of civil society groups and NGOs.

Although the initiatives don’t have any actual binding effect on the talks, as MEPs will ultimately have the power to give final approval to the pact, their passage has a significant bearing on the process. Activist and consumer groups called the vote, and especially the ISDS decision, “extremely disappointing” and “a blunder” while criticizing it for failing to adequately address their critical concerns.

The approved text proposes to “replace the ISDS system with a new system for resolving disputes between investors and states.” The clause was promoted by Parliament President Martin Schulz as a compromise to get the possible largest consensus within Progressive Alliance of Socialists and Democrats, the second largest political group in the assembly, which explicitly rejects the older version of the scheme, and still keep the door open to an international trade court. The clause is similar to the one pitched earlier this year by EU Trade Commissioner Cecilia Malmström and adopted by the Parliament’s International Trade Committee in May.

German Social Democrat Bernd Lange said that the old ISDS had been “thrown to the dustbin of history” and that the Parliament had expressed their clear demands on negotiators with regard to clear reservations on the cultural industry, public services and strict data protection.

The vote raises obvious questions about status of the investor protection measures in the Comprehensive Economic and Trade Agreement (CETA) signed by Canada and the European Union at the end of 2013, but which still has to be ratified by the EU’s member states before coming into force in 2018. Matthias Fekl, France’s Secretary of State for Foreign Trade told the Quebec newspaper Le Devoir last month that CETA is unlikely to be ratified in France and a number of other European countries unless significant changes are made to the deal’s ISDS provisions.