Member states warn Juncker against ISDS concessions (Matthias Reichl)

Date: Thu, 23 Oct 2014 10:08:09 +0200

 From: Martin Pigeon <>


FYI, an interesting piece on the pressures from Member States on Juncker on ISDS

Members states warn Juncker against ISDS concessions

As Juncker gives reassurances to the European Parliament over free trade with the US, 14 member states are urging him to stick to the script.

by Dave Keating on 22.10.2014 / 22:48 CET

Jean-Claude Juncker, the president-elect of the European Commission, was warned by member states today (22 October) not to make concessions to MEPs on investor protection in a free trade deal between the European Union and the United States, according to a letter seen by European Voice.

In a speech to the European Parliament this morning, ahead of a vote to confirm his college of commissioners, Juncker told MEPs that he “took note” of the confusion and controversy around the issue of investor-state dispute settlement (ISDS) mechanisms that surfaced during the hearing of Cecilia Malmström, a Liberal from Sweden and the commissioner-elect for trade.

There was confusion over whether Malmström supports ISDS, which allows foreign corporations to bypass national courts and settle disputes with governments through international arbitration. Though such mechanisms are a regular feature of free-trade deals, many MEPs do not want one included in the EU-US free trade deal currently being negotiated. There has reportedly been disagreement between Malmström and Juncker’s team over whether to include ISDS in the deal, with Malmström preferring to keep it on the table.

“Let me once again state my position clearly,” Juncker said. “My Commission will not accept that the jurisdiction of courts in the EU member states be limited by special regimes for investor-to-state disputes.”

“In the agreement that my Commission will eventually submit to this house for approval there will be nothing that limits for the parties the access to national courts or that will allow secret courts to have the final say in disputes between investors and states,” he said. He announced that Frans Timmermans, the centre-left Dutchman designated to be Juncker’s right-hand man as vice-president for better regulation, will be overseeing Malmström’s work in this area. He said that ISDS will not be included in the free-trade deal unless Timmermans signs off on it.

Juncker’s assurances came despite receiving a letter from 14 member states yesterday (21 October) warning him that ISDS was part of the mandate for EU-US free trade negotiations agreed by member states. The German government is opposed to including ISDS in the free trade deal, and German MEPs make up the largest delegation in the European Parliament.

The letter, which is signed by trade ministers from countries including the UK, Ireland, Denmark, Spain and Lithuania, states that “the Council mandate is clear in its inclusion of investor protection mechanisms in the TTIP negotiations”.

“Many of the concerns about TTIP are based on misconceptions,” the trade ministers wrote. “For example, that TTIP could undermine public services, undermine the right of national governments to regulate, or undermine EU standards on food or health and safety. The response to those criticisms – as some are calling for and tempting as it may be – should not be to jettison the difficult issues. That will lead to a lowest common denominator deal at best or no deal at all.”

However Juncker appears to have ignored this warning today in his speech. Speaking at a press conference after the hearing, Juncker said that there is no difference between his position and Malmström’s.

“We cannot impose our will on our US friends while we are in the process of negotiating,” he said. But he added: “I should clearly say what my opinion is.”

On 10/22/2014 12:22 PM, Pia Eberhardt wrote:

Dear all,

you might have seen in Juncker’s speech that he was again quite critical about ISDS. I copy the relevant section below. He had been asked to clarify his position by several parties.

My assessment:

– this is important, no doubt, it could indeed be a step towards the EU’s exit from ISDS in TTIP

– interesting new role for Frans Timmermans who’s now also

responsible for „sustainable development“

– however, one could argue that the criteria outlined by Juncker

are already met by CETA:

a) the jurisdiction of courts in the EU member states is not

really limited by ISDS (it just opens up a parallel legal regime for

foreign investors)

b) ISDS also does not limit foreign investors‘ access to national


c) the only real improvements that CETA makes is on transparency

of ISDS proceedings, so one could argue that, under CETA, there won’t

be any secret courts

d) the proponents of the system of course argue that it is

totally in line with the rule of law

– the only point where I don’t see they can twist the argument in

favour of ISDS is „equality before the law“. ISDS simply provides

special rights to foreign investors. So, rights that are available to

no one else. This has nothing to do with „equality before the law“

Hope this is useful,


From his speech:

Investor-to-state disputes

I took note of the intense debates around investor-state dispute

settlement (ISDS) in the Transatlantic Trade and Investment

Partnership (TTIP) negotiations. Let me once again state my position

clearly, that I had set out on 15 July in front of this House and that

you will find in my Political Guidelines: My Commission will not

accept that the jurisdiction of courts in the EU Member States be

limited by special regimes for investor-to-state disputes. The rule of

law and the principle of equality before the law must also apply in

this context.

The negotiating mandate foresees a number of conditions that have

to be respected by such a regime as well as an assessment of its

relationship with domestic courts. There is thus no obligation in this

regard: the mandate leaves it open and serves as a guide.

I had thought my commitment on this point was very clear but I am

happy to clarify and reiterate it here today as a number of you have

asked me do so: In the agreement that my Commission will eventually

submit to this House for approval there will be nothing that limits

for the parties the access to national courts or that will allow

secret courts to have the final say in disputes between investors and


I have asked Frans Timmermans, in his role as First

Vice-President in charge of the Rule of Law and the Charter of

Fundamental Rights, to advise me on the matter. There will be no

investor-to-state dispute clause in TTIP if Frans does not agree with

it too.

I am confident that – with your support – we can negotiate an

ambitious trade agreement with the U.S. along these lines, with full

respect of European interests and the rule of law.

* * * * * * * * * * *

P i a   E b e r h a r d t

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