Negotiations on this investor state dispute mechanism have been frozen for the past few months after a public outcry over potentially allowing business interests to overturn national laws in special tribunals.
The new proposals presented to trade ministers in Brussels yesterday by Commissioner Cecilia Malmstrom were described by the French and German ministers as a “political revolution”.
However, Minister for Jobs, Enterprise and Innovation Richard Bruton was less effusive and while welcoming it said the Commissioner had made great progress and that investors with a grievance could choose to go to domestic courts, as they do now, or opt for the new scheme.
While protecting investors was good, it could only be used in exceptional circumstances and will not challenge a government’s right to maintain its laws, he said. There will also be an appeal mechanism that will be more like traditional courts.
However, while a bilateral agreement such as this would be good for the medium term, he believed in the longer term a multilateral body like the the World Trade Organisation should provide such a platform.
Following the ministers’ meeting, the German trade minister Matthias Machnig and his French counterpart, Matthias Fekl told a joint press conference: “This is a political revolution that now needs to be made more concrete.”
The issue of giving ministers access to the consolidated text of the various components of this vast trade agreement is also controversial with the US promising to provide them in secure reading rooms from where they can not be removed.
Ms Malmstrom will now develop a legal proposal that must be accepted by the European Parliament and member states. There will be a vote by MEPs in June.
They are very divided on the issues involved.
Meanwhile, the European Citizens’ Initiative Stop the Transatlantic Trade and Investment Partnership group has gathered 1.7 million signatures against the agreement.
“The reformed investor state dispute mechanism mechanism system still favours foreign investors and still allows for independent courts to be circumvented by using private arbitration instead,“ said the organisation’s representative Michael Efler.
The commissioner said she hoped to have a legal proposal by summer’s end.