EU Pauses Talks on Investment Provisions of FTA with U.S.
The European Union announced Jan. 21 a pause in negotiations on the investment provisions of a free trade agreement with the U.S. to provide an opportunity for public input. A proposed text on investment, which the EU states will include sections on investment protection and investor-state dispute settlement, will be published in early March, followed by a three-month public comment period. The remainder of the Transatlantic Trade and Investment Partnership negotiations, including the next round scheduled for March 10-14, will continue as planned.
According to a European Commission press release, the move reflects “unprecedented public interest” in the TTIP as well as a “determination to secure the right balance between protecting European investment interests and upholding governments’ right to regulate in the public interest.” EU Trade Commissioner Karel De Gucht acknowledged that “some people in Europe have genuine concerns about [the investment] part of the EU-US deal” but said he is determined to “make the investment protection system more transparent and impartial” and to close “once and for all” legal loopholes in some existing arrangements.
The EU is therefore using the TTIP talks to advance an already ongoing effort to provide “clearer and better standards” for investment protection. This effort is focused on clarifying and improving investment protection rules, including referring explicitly to the right to regulate to pursue legitimate public policy objectives, detailed guidance on determining whether or not a government measure constitutes indirect expropriation, and defining precisely what “fair and equitable treatment” means. The EU is also working to improve how the dispute settlement system operates, such as by making it more transparent and introducing a binding code of conduct to ensure that arbitrators act impartially. These principles are reportedly included in the FTA the EU recently concluded with Canada and are intended to be incorporated into all future EU investment agreements.