Brussels proposes new plan for trade disputes

Proposals for an alternative court system to judge disputes between investors and governments under the terms of the planned EU-US trade agreement have been unveiled by European Trade Commissioner Cecilia Malmstrom.

It would replace the existing Investor State Dispute Settlement system, which has been temporarily suspended from the ongoing negotiations but which the US is adamant is required in the final Transatlantic Trade and Investment Partnership agreement.

Many of the new provisions attempt to address key public concerns such as that investors’ interests would trump governments’ right to legislate on public issues such as the environment if it interfered with investor profits.

It would also change the current practice of disputes being settled by a tribunal of investment lawyers acting outside national civil law.

Ms Malmstrom said that the new proposals aimed to create a transparent, democratic system with a special court system, having a panel of 15 part-time judges qualified in national and international courts similar to those in the International Court of Justice or the WTO system.

Five of the judges would be appointed by the US, five by the EU and five would come from other countries.

Three would hear cases and would be chosen at random with parties having no say.

More than 2.75 million people have signed a European petition against the trade agreement.

BusinessEurope, of which IBEC is a member, said it will study the proposals but was concerned that the loser pays principle might deter investors, especially SMEs from using the mechanism.


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