World Bulletin / News Desk
The European Union has more work to do, experts say, if it hopes to seal a transatlantic trade deal that has been criticized for leaving governments open to international legal action from companies affected by changes to tax and regulation.
The European Commission, the EU's executive arm, is right now negotiating a trade and investment treaty with the United States - the Transatlantic Trade and Investment Partnership (TTIP) - that it says could add 119 billion euros annually to Europe's economy and 95 billion euros to the U.S. economy.
However the treaty faces growing opposition in Europe from politicians, labour unions and campaign groups who fear it may prevent governments from being able to ban unsafe products or tax businesses because of a provision protecting investors' rights.
The provision referring to "fair and equitable treatment", was introduced to treaties decades ago to allow investors to seek redress if their assets were expropriated by governments.
It allows businesses to sue via international courts that do not defer to national interests and has increasingly been used to sanction governments over everything from banning chemicals, withdrawing tax breaks or writing new environmental regulations.
Matthias Fekl, French minister for trade, is especially critical of the EU's plan to include this right to sue in tribunals in the TTIP.
He said in a recent interview that France would "never allow private tribunals in the pay of multinational companies to dictate the policies of sovereign states."
But businesses and their lobby groups have told the European Commission they object to any scaling back in their ability to sue governments or any requirement they do so in national courts.
In response, the EC has redrafted parts of the trade treaty to limit the circumstances under which a claim can be made.
It has also proposed a new appeals process for governments and suggested new rules for selecting arbitrators - currently mainly corporate lawyers who campaigners say are biased towards corporations.
It's not a watertight solution, some say.
"There are definitely some improvements but it's not a dramatic reform," said Lise Johnson, Head of Investment Law and Policy at Columbia University's Center on Sustainable Investment.
"I don't think there is enough clarity on fair and equitable treatment to reduce the scope for arbitrators to interpret it creatively," she added.
Matthew Weiniger, a partner at law firm Herbert Smith Freehills in London said he expected any tightening of the key clauses to be outweighed by the expansion of the number of European countries which will now be subject to lawsuits.
"There's no question about it. There will be claims," he said, noting Eastern European countries in particular face claims over regulations which change the business environment unexpectedly.Güncelleme Tarihi: 14 Haziran 2015, 09:02