EU Trade Insights | October 23, 2014
Singapore concerned by ISDS debate, asks investment be “decoupled” from EU deal
As the debate in Europe over investors’ rights to sue States is growing, Singapore has been asking the European Commission to agree to a decoupling of the bilateral trade agreement as the country is concerned the investment protection part of the deal could hold up the entire pact.
Because the EU executive did not yet have competence on investment matters in 2007 when it was given a mandate by the Council to start negotiations with Singapore, it could not discuss investment protection provisions. The investment chapter of the EU-Singapore trade pact (EUSFTA) was thus included two years after talks on the overall free trade agreement – on goods and services – were concluded.
During a meeting scheduled to take place behind closed doors later this afternoon (23 October), Singapore’s Ambassador will again suggest to representatives from DG Trade that the goods and services part of the trade pact be separated from the investment part when the EU executive asks the Council its authorisation for signature and conclusion of the deal(s), a source close to the talks told EU Trade Insights.
But the Commission does not appear to share Singapore’s views. “We have agreed with Singapore that the investment protection chapter is an integral part of our trade agreement and that’s why we want to present it as a single package”, EU Trade spokesman Wojtek Talko told this website. “We have been waiting to finish the negotiations on investment protection to give the Council and the EP the full package. For me, it doesn’t make sense to have two separate tracks for different chapters of the same deal”, he added.
During today’s meeting, Singapore will “seek the Commission’s views on the way forward”, ie whether decoupling is a possibility, a source explained, noting there was “no point holding back services and goods” because of the EU’s debate on investor-to-state dispute settlement (ISDS). While Singapore believes decoupling of the two parts of the deal remains an option, it will not push the Commission should the EU executive disagree, the source pointed out. But it is a “good suggestion that can be explored”.
It is however very unlikely the European Commission will accept the Southeast Asian country’s request. While the debate in Europe on ISDS has indeed intensified, most voices raised against the mechanism have so far only linked the procedure to the EU-US trade deal or the EU-Canada pact. The inclusion of ISDS in the Singapore agreement has not – for the time being – raised any clear-cut concerns.
The conclusion of the talks on the investment part of the EUSFTA was officially announced by both sides on 17 October.