Last week, the European Commission presented a proposal to reform the Investor-to-State Dispute Settlement (ISDS), which forms part of the draft text for Trans-Atlantic Trade and Investment Partnership (TTIP) between the EU and the USA. Yet, it is fraught with problems, as those few adjustments do not even address the heart of the ISDS-problem.
Almost 150,000 organisations and individuals who participated in a public consultation on the Transatlantic Trade and Investment Partnership (TTIP) of the European Commission, made a strong statement. According to EU's own reporting, 97% does not want the controversial investor-to-state-dispute settlement (ISDS)-mechanism to be part of the trade deal. Worldwide, more than 3000 international investment agreements with ISDS exist, of which the Netherlands has more than 90s - predominantly with developing countries. Many of these countries have suffered damage caused by ISDS. This has started to set off the alarm bells in Europe and should definetely also have consequences for the already existing agreements.
Just before being elected president of the European Commission, Jean-Claude Juncker from Luxemburg, has spoken out against ISDS. The ‘Investor to State Dispute Settlement’ would be a part of the proposed EU-US trade agreement TTIP. It would deal with conflicts between investors that feel disadvantaged and states they hold responsible. Those conflicts would not be taken to regular courts but to a special dispute settlement tribunal. Mr Juncker is clearly opposed to such a provision.
Thanks to the negotiations about TTIP, the public debate about bilateral investment treaties (BITs) is slowly underway. Especially the ‘Investor-to-State Dispute Settlement Mechanism’ (ISDS) of TTIP threatens to lower the norms to protect people and the environment. BITs make use of very controversial arbitrage systems (ISDS), which enable investors to bypass the national court to sue governments for their national policies and laws.
Recently, India has terminated its bilateral investment treaties (BIT) with 57 countries, including the Netherlands. This means Dutch companies in India, and Indian companies in the Netherlands, can no longer make use of the controversial arbitration procedures called ISDS. According to Burghard Ilge from Both ENDS, India's action is a step in the right direction. However it is a missed opportunity that the Dutch government did not agree with this termination. This way, old investments stay protected for 15 years under the former BIT.
In 2001 Tanzania and the Netherlands signed a treaty only known to a few; a so-called Bilateral Investment Treaty aimed "to extend and intensify the economic relations between them and to stimulate the flow of capital and technology and the economic development of the Contracting Parties". But signing the treaty was in fact mainly a symbolic act which since then has had little if any effect in this respect. In fact, a report by the Netherlands Bureau for Economic Policy Analysis found that BITs have no positive effect on investment in low and lower middle income countries located in Latin America and Sub-Saharan Africa, including Tanzania.
On 10 October, we’ll sound the alarm against TTIP: the Trans-Atlantic Trade and Investment Partnership. For years, the EU and the USA have negotiated behind closed doors to define the rules of the game for this bilateral treaty. Yet, it has only been a year since the Dutch are getting to know the consequences of TTIP.
TTIP means the disruption of existing regulation for the environment, labour and safety. Moreover, the promised economic growth is an illusion. Those are the clear-cut conclusions of various scientific studies.
By now, TTIP, the new EU-US free trade agreement, has become a hot topic in the Netherlands too. There has been heavy protest against this trade deal from civil society organisations, scientists, lawyers and civilians, who all have set off a ‘TTIP-alarm’. How much truth is there in their concerns about TTIP? What are the implications of TTIP for the Netherlands? If you are curious to find out the answers to these questions, then come to ‘The Big TTIP Debate: The debate about the free trade agreement between the EU and US’ on Friday evening April 17th. Several speakers will discuss with each other and with the audience about the above (and many more) questions.