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TTIP AND ISDS: NOT IRRECONCILABLE ACRONYMS
agreements provide guarantees to help assuage investor’s concerns and reduce the
need for other inducements to attract foreign capital.”17
As inflow of foreign direct investments into developed economies and particularly
the EU has steadily decreased after the sharp fall in 2012, the latest recovery does not
help to raise its historically lowest share in global terms (39%).18 Besides, European
flow of outward and inward FDI remained at barely half the peak level seen in 2007,19
and the US and the EU combined saw their share of global FDI inflows cut nearly in
half over the past seven years.20
Despite this recent decline of the share of transatlantic FDI flows in recent
years, 62% of inward US FDI stock is held by EU countries, and 50% of outward
US stock is located in the EU. EU countries are still major investors in the US.
Their combined investments in the US top €1.6 trillion, making the EU the biggest
investor in the US. Therefore, from the perspective of the EU, ensuring European
investments abroad receive the best possible protection, which is an essential aim of
the TTIP.21 On the other side of the pond, the US accounts for one third of outward
EU FDI flows.22 Obviously, the TTIP has the potential to bring significant benefits
in trade and investments to both sides of the Atlantic, and the current investment
relationship between the two economic powers is the most convincing argument
against the risk of increased ISDS litigation.23
Are risks real or exaggerated?
Various stakeholders question the real positive impact of the investment chapter
in the agreement on increased foreign investment from the US, despite the fact that
the EU and the US are mutually desired investment partners. They particularly single
out possible costs and risks, such as a reduced policy space and a threat of expensive
litigation, and saying that the TTIP will just provide a platform for multinationals
corporations “to engage in litigious wars of attrition to limit the power of governments
on both sides of the Atlantic.”24 The author must agree with Quick that perhaps the
central claim against ISDS is that “the state deprives itself of its regulatory autonomy
17 Jessi Patton, A Case For Investor-State Arbitration Under the Proposed Transatlantic Trade and
Investment Partnership, Arbitration Brief, Vol. 4, No. 1 (2014), p. 86.
18 UNCTAD, World Investment Report 2014: Investing in the SDGs: An Action Plan, United Nations
(2014), p. XIV.
19 Supra note 18, p. XXI.
20 Supra note 18, p. 5.
21 European Commission, The Transatlantic Trade and Investment Partnership (TTIP): TTIP Explained,
p. 3 (19 March 2015), see
22 Supra note 18, p. XXII.
23 Supra note 17, p. 83.
24 Corporate Europe Observatory, ATransatlantic Corporate Bill of Rights: Investor Privileges in the EU-US
Trade Deal Threaten Public Interest and Democracy (October 2013), p. 3, see http://corporateeurope.
org/sites/default/files/attachments/transatlantic-corporate-bill-of-rights-oct13.pdf.