Business
business
The implementation of the world’s largest free-trade agreement has been halted once again, as opinions continue to
diverge among the European Union and
the United States in discussions. Representatives from the European Union and the
United States initiated negotiations in the
summer of 2013 to establish the Transatlantic Trade and Investment Partnership.
The TTIP is an international effort to remove
barriers to trade and investment across the
Atlantic. The partnership is set to become
the largest free-trade area in the world,
with the EU and the United States representing 45% of the global GDP today.
The ISDS is however received positively across the
United States, and is demanded to be included in
the final agreement. US Undersecretary for International Trade at the Commerce Department, Stefan Selig, said the United States believes the ISDS
mechanism “increases the security of companies
willing to make investments and arguably makes
that country, whether it’s the United States or any
country in Europe, a more attractive investment
destination.”
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Cecilia Malmström
The negotiations have been consistent since the
summer of 2013, but recent disputes over specific
aspects of the TTIP have halted progress. What has
recently become the main debate in TTIP negotiations is the Investor State Dispute Settlement (ISDS).
An agreement has proven difficult as current ISDS
are by critics considered threatening to national
regulations within the European Union. With the ISDS
system, corporations will be able to challenge national governments, and impact sovereign governments’ right to regulate. The expressed concerns
are regarding the extensive authority this would
provide corporations with, in relation to national
authorities. The ISDS would allow corporations to
sue governments when legislation was introduced
that may be harmful to company profits. Critics
say the current court set-up gives companies too
much power to sue governments abroad if investments run into problems.
In a recent proposal published in May by Malmström, the Commission suggests an ISDS system with
functions more similar to traditional courts. This involves the appointment of permanent arbitrators,
with similar qualifications to those of national judges, and the introduction of a bilateral appeal system. Despite a revised version of the agreement,
the full Parliament voting was delayed June 10th
this year, as the resistance towards the current ISDS
Swedish politician, and member of Folkpartiet, (the
Swedish Liberal Party) Cecilia Malmström, is currently holding the vital position of EU Trade Commissioner in the European Commission. In connection
to the ongoing discussions on ISDS, she recently
expressed that “excluding ISDS from TTIP means
missing the best chance to reform the system for a
generation”. Malmström has been a strong advocate for EU legislation, and further stated that she
will work hard at enforcing EU and national legislation in areas such as food safety or environmental
protection.
Further steps towards finalizing the TTIP agreement
were taken on July 8th as the European Parliament
voted to keep the ISDS system in the agreement.
What the ISDS system will look like will be decided
during further discussions, and the voting on ISDS
systems will most certainly become ruling for the
future of the trade agreement, which is set to be
concluded by the end of 2015. Many critics, however, state that the TTIP negotiations will most likely
continue on into 2016 as well.
TEXT: Sofie Ågren
SOURCE & PHOTOS: The European Commission
SACC-PHILADELPHIA
The Transatlantic
Trade and Investment Partnership
was continuously too strong.