European Parliament backs TTIP, rejects ISDS

Parliament adopted a resolution supporting the transatlantic trade deal on Wednesday (8 July), but rejected a key US demand for an extra-judicial arbitration mechanism. EURACTIV France reports. 

Second time lucky. Members of the European Parliament yesterday voted by 436 to 241 in favour of adopting a common position on the Transatlantic Trade and Investment Partnership (TTIP).

Parliament’s support comes on the condition that the investor-state dispute settlement (ISDS) mechanism be replaced by another system, but many observers remained sceptical as to whether this will be possible.

Unlike the June plenary session, a vague consensus began to emerge within the main political groups around Bernd Lange’s TTIP report. But the debate in the hemicycle was heated, and a number of amendments were submitted.

>>Read: Delayed TTIP vote drives wedge between grand coalition

"We have worked hard since last year to make the agreement as transparent as possible. Progress has been considerable," said Bernd Lange, the German TTIP rapporteur.

Wednesday's debate threw the divide between TTIP's diehard opponents and the more measured, silent majority, into sharp relief.

Majority support

Most of the committee chairs expressed their support for the commercial agreement, for a wide variety of reasons.

Francisco Jose Millan Mon, from the Committee on Foreign Affairs, stressed the geopolitical implications of TTIP and echoed the sentiment of Trade Commissioner Cecilia Malsmström, who believes the EU "needs an ally because we know that the strength of our voice in the world is, in relative terms, decreasing".

"The agreement will allow us to bring the United States closer to us. The challenges that we face in the Mediterranean should bring us closer to our natural ally," the committee chairman said.

Uncertainties over development assistance

Arne Lietz, a member of the Development Committee, insisted that trade and development policy must go hand in hand.

"We should carry out an analysis of the effects of TTIP on development. We have too little information on the impact it could have, there have not been enough detailed studies," the MEP said.

>>Read: TTIP contradicts post-2015 development goals, experts say

According to a study by the German IFO institute, developing countries could benefit from the agreement, as increased economic growth in the EU and the United States would also increase demand for products and services elsewhere.

>>Read: Foodwatch: German TTIP study ‘utopian’

Not everyone agrees. Developing countries today benefit from preferential access to European and US markets, but this may be eroded by an EU-US agreement, according to a study by Belgian NGO CNCD.

Danish MEP Jeppe Kofod, from the Industry Committee, told his peers that an outright rejection of TTIP was not a viable solution, but that the EU needed a strong declaration of its position.

The Environment Committee expressed concerns over health and environmental aspects of the deal, as well as the arbitration system.

"We have certain concerns over standards: for beef, cloned meat, concessions on water and public health, ISDS. The proposed compromise is not enough!" Green MEP Bart Staes said.

Jerzy Buzek said that a successful treaty would see energy prices converge on both sides of the Atlantic. "We need liquefied natural gas from the United States," the MEP said. But he accepted that Europe's carbon restrictions may hinder international competitiveness.

Finally, the Agriculture Committee agreed that TTIP would improve access to American food markets, but stressed that European standards must not be compromised.

Despite broad support for TTIP in the committees, many MEPs are less enthusiastic about the trade deal.

Left Front MEP Patrick Le Hyaric asked on Tuesday 7 July for the negotiations to be suspended in the wake of the latest revelations of NSA spying on European leaders. He also bemoaned the continued inclusion of ISDS in the latest version of the Lange report, arguing that this would lead business rights to “triumph over human rights”.

Arbitration debate rumbles on

The issue of dispute settlement between investors and states, which has been the most contentious point in the negotiations, was finally adopted by 447 votes for to 229 against, with 30 abstentions. The final compromise calls for a new public legal structure to replace the investor-state dispute settlement mechanism.

Gianni Pittella, the leader of the S&D group in the European Parliament, said "ISDS is dead. It must be replaced by a new public and transparent system of investment protection, in which private interests cannot undermine public policy and which is subject to public law."

>>Read: Pittella: ISDS is dead, EU-Canada trade deal must be reopened

But opinions are divided on the subject. Within the S&D group, but also among the Greens and GUE/NGL, many MEPs believe the new text, which suggests establishing a specific arbitration court for EU-US conflicts, is insufficient.

>> Read: Matthias Fekl: ‘The EU should have its own arbitration court’