Why the Commission’s proposal for an “Investment Court System” still fails to address the key problems of foreign investors’ privileges

Report

The European Commission unveiled a draft text for a chapter on investment protection and investor to state dispute settlement – now called the Investment Court System - to be included in the Transatlantic Trade and Investment Partnership (TTIP) with the US. This new system would replace the existing investor-to-state dispute settlement (ISDS) mechanism not only in TTIP but also in all ongoing and future EU investment negotiations.

Summary

The Seattle to Brussels Network remains of the opinion that the Commission’s proposals:

1) ignore the outcome of the Commission’s own public consultation on the issue;

In 2014 more than 150 000 people, organizations and companies participated in the Commission’s public consultation. More than 97% spoke out against any form of ISDS. While the Commission claims to take public criticism seriously, in reality it just ignores it by proposing a reform of something that is rejected in principle.

2) would dramatically expand the reach of ISDS, increasing the likelihood of claims against the EU and its member states;

So far only 8% of US companies operating in the EU are covered by ISDS due to Bilateral Investment Treaties. TTIP would cover all US-firms, currently more than 47,000. Today investors already claim more than 30 billion euros with ISDS cases. With TTIP this number could explode because of the extended scope of TTIP.

3) do not meaningfully reform the ISDS system in CETA – CETA should not be signed

The Commission implicitly agrees that ISDS-reform in CETA doesn’t go far enough when it now sees the need for reform within TTIP.

Moreover because of the close connection of the US and Canadian economies, 4 out 5 US companies operating in Europe would already be covered by ISDS in CETA with help of their Canadian subsidiaries. 2

4) ignore the elephant in the room: that there is no need for ISDS; and

5) do very little to address the fundamental problems of the ISDS system.