Politico: TTIP talks, ISDS walks

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Transatlantic trade talks continue but controversial investor-state dispute settlement has been pushed aside until the summer

[Reposted from Politico  |  Hans Von Der Burchard  |  April 20, 2015]

But the European Commission’s plan to deal with one of the thorniest issues on the table — how to agree on a reform of an international tangle of agreements governing disputes between investors and foreign governments — isn’t on the table this week in New York and has been put off until the summer.

As the talks began, the Commission was determined to focus on the positive. “We have a new momentum in these negotiations as we enter into this round,” Malmström said. “We are convinced that it will contribute to growth and jobs on both sides.”

EU officials also hailed progress in the US on a fast-track trade bill that could help avoid problems in Congress. “This is something we’ve been waiting for,” Valdis Dombrovskis, the Commission vice-president for the euro and social dialogue, told POLITICO reporters and editors at a roundtable in Washington on Friday. For the two sides to reach an agreement, EU negotiators need confidence that Congress won’t “pick apart the deal, paragraph by paragraph,” he said.

But TTIP critics in the European Parliament and in some lobby groups are stepping up their attacks on the controversial Investor State Dispute Settlement (ISDS) process. MEPs will consider a parliamentary resolution in the second week of June on whether to support TTIP and under what conditions it will do so — with ISDS as a major sticking point. But the Commission’s plan for the explosive ISDS topic won’t come before September, according to an official in the Commission’s trade directorate.

With one of the most important parts of TTIP — services — excluded from this round’s talks, negotiators will focus on regulatory cooperation and on making as much progress as possible on technical issues. The EU is proposing a comprehensive transatlantic information exchange on planned regulations.

Anti-TTIP forces are keeping up the pressure on that cooperation. The Brussels-based Corporate Europe Observatory leaked a negotiation document seeming to indicate that this information exchange will not only concern regulations made in Brussels or Washington, but also national law and regulations of EU member states or US federal states. The group said that the proposal is “forcing laws drafted by democratically-elected politicians through an extensive screening process.” A Commission official defended the proposal, saying: “None of the provisions will compromise the domestic decision-making and legislative process; cooperation is largely focused on technical rules that govern the marketing of goods and supply of services.”

Meanwhile, the Commission hopes it can sell the small business angle. Malmström laid out the case yesterday for improving regulatory cooperation to help small businesses, including setting common standards and removing tariffs. “The regulatory part of TTIP is not for big business,” Malmström said. “It’s very much for small business agenda. Big companies can deal with double inspections, but small companies do not have the resources. SMEs have also raised how hard it can be to get information about what regulation applies to their products.”

According to a new Commission report, 150,000 small and medium-sized enterprises accounted for 28 percent of all EU exports to the US — some €80 billion a year in the EU exported to the US in 2012.

But even the commissioner for trade agreed that the ISDS issue still has to be addressed. “We are now working at substantially reforming the ISDS agreement,” Malmström said, pointing out that the existing agreements “are quite old-fashioned.”

Adam Behsudi contributed to this story.

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