The purpose of the negotiations on the Transatlantic Trade and Investment Partnership, TTIP, is to reduce barriers to trade and investment in order to generate jobs and growth. According to assessments made by the European Commission and other European bodies, a comprehensive TTIP could over time boost the EU's GDP by 0.5% per annum, resulting in 400,000 additional jobs across the EU. The gains for Ireland could be double that in proportionate terms because of the significant flows of trade between Ireland and the US.
Ireland was one of 14 EU member states that wrote to the new Commissioner for Trade, Cecilia Malmström, expressing the view that the public consultation on investor protection in TTIP held earlier this year was an important step in seeking to strike the right balance and that stakeholders’ contributions should be carefully considered before a firm decision is reached on the way forward. While no reply has issued to the letter, I am aware that the results of the consultation will be made available soon.
The aim of the investment protection chapter of the EU's free trade agreements is to provide EU investors abroad with a level of protection similar to that which would obtain within the EU.
In respect of inward investment, Ireland guarantees investors in Ireland that they will not be treated in a discriminatory manner. The protection is provided by virtue of our Constitution. However, all other EU member states have bilateral investment treaties with third countries that include investor-state dispute settlement, ISDS, arrangements. Nine member states have such treaties with the US. TTIP would replace these with a single arrangement. Ultimately, an EU mechanism would provide a uniform system of guaranteed fair and equitable treatment for investors across all EU member states.
International experience with ISDS points to a wide disparity of bilateral investment agreement provisions, and some cases taken by investors under some of these have brought criticism on the mechanism. TTIP and other agreements provide an opportunity for the EU to make improvements that address the weaknesses identified in those other cases.
The mandate for negotiation has made it clear that the objectives of any investment protection provisions would be without prejudice to the right of the EU and the member states to adopt and enforce measures necessary to pursue legitimate policy objectives, such as social, environmental or security objectives, stability of the financial system, or public health and safety, in a non-discriminatory manner.
Additional information not given on the floor of the House
In the case of the recently concluded negotiations between the EU and Canada, for example, a breach of the fair and equitable treatment obligation could only arise when there is denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, including a fundamental breach of transparency, in judicial and administrative proceedings; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or abusive treatment of investors, such as coercion, duress and harassment.
In addition, in the Canada agreement, there is provision for a list of arbitrators pre-agreed by the EU and Canada. In case of disagreement between the disputing parties, the arbitrator will be selected from this list. This ensures that the EU or Canada has always agreed to at least two of the three arbitrators that will act under agreement and will have vetted them to ensure that they live up to the highest standards.
Ultimately, and only after prior consultation with member states and in accordance with the EU treaties, the inclusion of investment protection and ISDS in TTIP will depend on an outcome satisfactory to the EU in meeting its interests both in relation to investment protection and in view of the final balance of the agreement as a whole.
I recently met the US Trade Representative, Mike Froman, who told me that the US also sees the need for major improvement in the terms of ISDS. He reminded me that the US also has a strong interest in ensuring that the right of the US Government to regulate in the public interest is fully respected.