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01/09/2016

Divided EU Parliament postpones vote on TTIP

Trade & Society

Divided EU Parliament postpones vote on TTIP

Lawmakers vote on TTIP. [European Parliament]

The European Parliament failed on Tuesday (9 June) to agree a unified stance on a proposed trade deal with the United States, postponing a vote that was meant to cement its support for the biggest accord of its kind.

The failure to agree on a resolution meant that the Parliament would merely debate the proposed deal in Strasbourg on Wednesday, but not hold a vote, highlighting the growing doubts in the European Union about its benefits.

Negotiations on the Transatlantic Trade and Investment Partnership (TTIP), which would encompass a third of world trade, are still under way but, because the Parliament has the power to reject any final deal, it must set out its position during the process.

EU lawmakers preparing the resolution received more than 200 proposed amendments, meaning it was highly unlikely to pass, prompting parliament president Martin Schulz to postpone the vote to avoid the public embarrassment of having the resolution defeated.

“One could call it failure,” tweeted centre-right lawmaker Daniel Caspary of the European People’s Party (EPP).

Far-left, far-right and Green lawmakers who are determined to block the pact seized on the postponement as a sign that the deal was in danger, but aides to centre-right and centre-left lawmakers said a vote was still likely to be held after the summer.

“The European Parliament’s establishment in is panic that the vote will reveal the clear divisions,” said French Green Yannick Jadot.

While an accord will not be ready before 2016, the European Parliament must establish its position much as the US Congress must decide whether to grant President Barack Obama “fast-track” powers to negotiate trade deals.

The Parliament’s positions have become harder to predict since last year’s European elections, in which anti-EU parties did well.

Much of the discord focuses on how companies settle disputes under the pact; lawmakers fear that US multinationals will challenge European laws on grounds that they restrict free commerce.

Washington says it considers the issue of investment arbitration non-negotiable because EU governments have secured some 1,400 investment protection agreements since the 1960s.

Critics of the deal also fear it will be detrimental to food safety and the environment.

“It is high time for the negotiators to take stock and stop the negotiations,” said Natacha Cingotti, a campaigner at Friends of the Earth Europe.

Background

In June 2013, EU heads of state and government authorised the Commission to start negotiating a free trade agreement with the US, giving guidelines concerning what the negotiations should include.

The guidelines stated that the EU should seek to include provisions on investment protection and investor-to-state dispute settlement (ISDS) in the proposed agreement.

Member states already have 1,400 ISDS-type agreements with other countries, some dating back to the 1950s. There is an urgent need for reform, and everybody agrees.

>>Read: Special report: TTIP and the Arbitration Clause

The EU executive consulted the public on its approach to investment protection and ISDS in the TTIP, asking whether the EU’s strategy achieves the right balance between protecting investors, and safeguarding the EU's right and ability to regulate in the public interest.

Negotiations on investment in TTIP were suspended in January 2014. They will only resume once the Commission believes its new proposals guarantee, among other things, that the jurisdiction of national courts won’t be limited by special regimes for investor-to-state disputes.

The final decision, which must be ratified by both EU Council and Parliament in a full vote, will only be taken with the agreement of European Commission First Vice-President Frans Timmermans. Commission President Jean-Claude Juncker gave Timmermans the veto. He will ensure that ISDS complies with the rule of law, and principles of equality and transparency, according to a memo published by the executive.

>>Read our LinksDossier: TTIP for dummies