The EU may scrap the most controversial part of the Transatlantic Trade and Investment Partnership (TTIP).
EU trade commissioner, Cecilia Malmstrom, has voiced her support for replacing the Investor-State Dispute Settlement (ISDS) with a permanent investment court.
The ISDS is a mechanism that sets the ground rules for foreign companies investing in other countries. It allows an investor to bring a country's government to an international court if they have broken the rules of prior agreements.
Malmstrom said her staff were already working on the proposal and told a meeting of MEPs "I believe that we should aim for a court that goes beyond TTIP". The ISDS has been subject to waved of criticism from environmentalists and Trades Unions who argue the mechanism will be used to degrade European regulations.
“This is a concern that united business and NGOs,” Malmström said. However, supporters of TTIP argue there remain no barriers to stop EU governments from passing or strengthening regulations. Roughly half of the world's bilateral investment treaties contain ISDS provision.
To contain public anxiety around the ISDS, the European Commission is considering “a clause that would say that investment protection rules offer no guarantee for investors that the legal regime under which they have invested will stay the same”, reports Euractiv.
Malmstrom has been an enthusiastic cheerleader for agreement that would streamline host of EU and US regulations. Last year, she argued:
Trade agreements can lower prices, widen choice and create high-quality jobs. TTIP must do exactly that.
When we lower the cost of trade, companies who are already trading across borders pass many of their savings on to consumers – if not all of them.
Should TTIP pass, the EU economy would benefit to the tune of €119bn (£144bn) a year – equivalent to an extra €545 for a family of four in the EU. The US could make gains of €95bn, with UK national income increasing by £4bn-10bn annually.