TTIP - a consultation that misses the key question

Date published: 8 July 2014

A year ago, the EU Member States gave a mandate to the European Commission to negotiate a Transatlantic Trade and Investment Partnership (TTIP, also know as TAFTA) with the United States. Among other things, the mandate mentions explicitly that the negotiation includes investor protection mechanisms in the free trade agreement.

The objective is to grant foreign investors (such as investment funds, banks or other corporations) the right to sue a state if it brings in a rule deemed “more burdensome than necessary” and the rule impacts negatively on the value of their investment. The claim could be brought in a private arbitration court, in a process known as ISDS (Investor to State Dispute Settlement).

The very principle of such a mechanism is anti-democratic, because it allows investors to challenge legitimate regulations and other rules that have been created and voted by democratic institutions with a view to protecting their citizens. Moreover, should an investor win a case in such a private arbitration court, the sued state would have to pay financial compensation possibly amounting to billions of euros, at taxpayers’ expense.

The introduction of ISDS in the TTIP negotiations met with strong opposition from civil society at large (consumer groups, trade unions, NGPs, academics and others) on both sides of the Atlantic, including many members of Finance Watch. The European Commission therefore decided to launch a public consultation on investor protection mechanisms in TTIP. However, this consultation fails to ask the most important question: do we need ISDS? Instead it proposes a series of provisions aimed at making ISDS more acceptable to its opponents – but these provisions are at best very light and do not solve the basic issue posed by such mechanisms.

Finance Watch has responded to the online consultation because we believe financial regulation would be negatively impacted by the introduction of ISDS in TTIP and could pose a serious risk to society. We therefore ask for a revision of the negotiating mandate so that it excludes ISDS.

The re-regulation of the financial sector is far from being completed and Finance Watch believes that citizens remain unprotected from a future financial crisis. If governments face a permanent threat of being sued following an unfavourable decision from an arbitration court, stretching their already stressed public budgets, they are certain to lower regulatory standards. As such, ISDS give a tremendous and illegitimate power to private investors. It would provide the financial lobby with an additional tool to influence and to “cast a chill” over the regulatory process.

Since launching the public consultation in March, the Commission has received thousands of responses from concerned citizens, encouraged by calls launched by several organisations across Europe.

The deadline for the consultation has been extended to 13 July: you can still have your say and submit your contribution to the Commission.

isdsYou can submit your views either directly or using an online petition tool, for example http://www.no2isds.eu/ or the 38 Degrees petition tool.

The next step will be an official report from the Commission and we hope that the pressure exerted by citizens will lead to a revision of the mandate and the removal of ISDS from the TTIP.

To learn more about Finance Watch’s position on TTIP, please watch or read the hearing of Thierry Philipponnat at the ECON Committee at the European Parliament in March 2014. To know more about TTIP and financial services have a look at the website of our Member SOMO and at the article they wrote together with CEO.

 

UPDATE 13 January 2015:

The European Commission published its report on the ISDS consultation, saying that it "has mobilised EU civil society to unprecedented levels for public consultations organised by the Commission. The Commission received a total of nearly 150,000 responses."

Thanks to all of you who participated!

Comments  

#2 Greg Ford 10 July 2014
Hi Bussat - should be fixed now, if not try these:

http://trade.ec.europa.eu/consultations/index.cfm?consul_id=179

http://www.no2isds.eu/

http://www.38degrees.org.uk/campaigns
#1 Bussat 10 July 2014
The link for petition doesn ´t work please control I would like share it in French or English

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