Paris caught meddling in TTIP arbitration debate

France has blamed a communication “failure” after EURACTIV revealed the existence of a letter instructing French MEPs how to vote on the controversial question of ISDS. Paris tried to rectify the error by sending another confidential letter to MEPs on 4 March. EURACTIV France reports.

On 26 February, EURACTIV France published the contents of a letter advising French MEPs on the official French position on the investor-state dispute settlement mechanism (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) agreement.

The letter, from the French Secretariat General for European Affairs (SGAE), was relaxed about the question of international arbitration tribunals, contrary to the harder line previously adopted by the government.

>> Read: France makes U-turn on TTIP arbitration

This apparent change of position upset many French MEPs, including Pervenche Berès of the Socialist Party.

ISDS, in France we will establish our position with the government, not the administration.

Pervenche Berès.

Matthias Fekl, the secretary of state for Foreign Trade, was quick to tell Le Monde that there had been a mistake.

“The letter from the Secretariat General does not reflect the French position. There has been an administrative error. We will be sending the MEPs our corrections on the question of ISDS”.

Confirmation came on Thursday 5 March with a new letter from the SGAE, presenting a revised, more succinct position on the hotly disputed subject.

But contrary to what some may have expected, the new SGAE position does not appear much changed. The latest letter proposes the development of a new, revised ISDS mechanism.

A new investor-state dispute settlement mechanism

“The basic concepts of “fair and equitable treatment,” the “legitimate expectations” of investors and “indirect expropriation” need to be clarified in a way that gives the right of regulation to the states,” the SGAE wrote.

This is essentially the same position, reworded. France is still trying to avoid closing the door altogether on arbitration courts in TTIP.

“The error that was made came from within the Ministry of Foreign Affairs […] letters from the SGAE are consensual by definition, as they are drafted by all the ministries,” the SGAE explained. The cosmetic changes to the letter appear to be a political manoeuvre on the part of the French government, which is still trying to persuade MEPs to adopt a moderate position on the subject.

But many of the French representatives remain firmly opposed to the very principle of arbitration tribunals.

Political problems of the SGAE

The French delegations in Brussels often approach the SGAE with caution, preferring instead to deal with France’s permanent representation.

“The SGAE is something of a free spirit; it had trouble switching from right to left in 2012, and so produces memos that do not always reflect the positions of the government,” an inside source told EURACTIV.

According to some sources, MEPs tend to contact the relevant ministries directly for details on projects, rather than going through the dedicated European service.

The SGAE is currently directed by Philippe Leglise-Costa, François Hollande’s former advisor, whose mission is to consolidate his control of the institution, to centralise power on European questions within the French government.

>> Read: Hollande and Valls divide EU affairs dossiers

Negotiations between the United States and the European Union on the Transatlantic Trade and Investment Partnership began in July 2013. The guidelines stated that the EU should seek to include provisions on investment protection and investor-state dispute settlement (ISDS) in the proposed agreement.

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

If the treaty is signed, it will affect almost 40% of world GDP. The transatlantic market is already the most important in the world, with €2 billion of goods and services exchanged every day.

The deal could save companies millions of euros and create hundreds of thousands of new jobs on both sides of the Atlantic. The average European household could save €545 per year and European GDP could increase by nearly 0.5%.

Brussels and Washington want to conclude the ambitious negotiations and seal the deal by the end of 2015.

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