Vieuws | 22 September 2015
EU to co-finance Investment Court System in TTIP from its budget
The European Commission wants the new Investment Court System (ICS) in the Transatlantic Trade and Investment Partnership (TTIP) to be co-financed from the EU budget only, Mauro Petriccione, Deputy Director-General at DG Trade has told MEPs. Addressing the EP’s International Trade Committee (INTA) meeting, on 21 September, he reassured MEPs that no national contributions would be needed to cover the €1,5 million EU share of the total €3 million costs of the new court.
Petriccione expressed confidence that even multiplication of bilateral investment courts would not create an unbearable burden for the EU budget. “We do not expect it to happen in a few years to come,” Petriccione said, hinting that the setting up of an international investment court could help solve the problem of a potential increase in the number of bilateral investment courts.
While presenting the draft proposal, on 16 September, the EU Trade Commissioner Cecilia Malmström made clear that the ICS in TTIP would be used as a template for other agreements with third countries. Petriccione confirmed that even China would be targeted.
He said the EU trading partners were slow to react to the draft. “We do not expect any serious reactions before the proposal turns into a formal position,” Petriccione said. He revealed, however, that the initial reaction of the US was rather “cautious.” “The US will be worried about the additional costs for business, the complexity of the mechanism and lesser benefits for US investors than they have in mind,” Petriccione said. “Vietnam has expressed its concern about an) ability of developing countries to comply with a system intended for developed countries,” he added.
Addressing a question on how the new system could be incorporated into the already agreed free trade agreement (FTA) with Canada, known as CETA, Petriccione suggested that the review clauses included in the deal could be of use. He argued that there is no need to re-open negotiations in order to upgrade the investment protection system in CETA. “The re-opening will not happen but some adjustments are possible,” Petriccione said.
On enforceability, the Commission wants to use the ICSID (International Centre for Settlement of Investment Disputes) convention that “allows the parties to get out of the agreement and make use of domestic courts,” Petriccione explained. He noted that creating an additional multilateral enforcement mechanism was “possible” but not easy. “We will begin discussions around this idea among like-minded countries,” he said, pointing to Canada, Japan and the US as most likely to be in favour. “We will see what the reaction of China is,” Petriccione added, arguing that it “was not totally impossible that China could be interested as the country often prefers multilateral solutions than the bilateral ones.” Concluding, he stressed that the Commission would focus on a bottom-up approach while building a consensus around the idea of a multilateral investment court.
Malmström is expected to present the ICS draft to her US counterpart Michael Froman on 22 September in Washington. Member states will express their views on the blueprint during the Trade Council scheduled for 27 November. It is not yet clear if the European Parliament (EP) will adopt a separate resolution on the draft once it becomes a formal proposal. In July 2015 the EP adopted its recommendations to the Commission on the TTIP negotiations, including the investment part of the future agreement.