369 / 464
355
TTIP AND ISDS: NOT IRRECONCILABLE ACRONYMS
Nevertheless, it is true that, in spite of a good effort to dispel widespread fears,
the European Commission does not help its cause by emphasizing the necessity of
reinvention of the system to make it credible and dismissing those rules already in
place.
53
This message does not reflect the true state of the investment arbitral system.
Given the growing opposition and ISDS “under siege”, the European Commission
struggles to defend its policy and demonstrate possible advantages lead to serious
doubts over the TTIP’s ambitions in investment protection. On the EU side, the TTIP
requires ratification in the European Parliament
54
as well as all 28 national parliaments.
55
Therefore, in order to pass 29 highly politicized tests, the European Commission can
play safe and give up ISDS or the whole investment chapter in the TTIP.
Under these circumstances
Kleinheisterkamp
and
Poulsen
advise that the exclusion
of investment protection from TTIP “would allow European policy-makers to pause
and rethink both the substantive and procedural rights in investment treaties “bottom
up”. Much work needs to be done to assure the consistency between investment law,
on the one hand, and EU law and national law of the member states, on the other
hand.”
56
Indeed, the complexities of the relationship between investment and EU law
needs to be resolved urgently; however, this may prove difficult since the relationship
has always been idiosyncratic. These legal systems are “work in progress”, permanently
developing and searching for an idealistic solution for their relationship. It would be
unreasonable to postpone negotiating investment protection issues in European free
trade agreements.
Offering opportunities for consolidating today’s treaty network, megaregional
agreements such as the TTIP or CETA may have significant implications for the
whole system of international investment treaty law.
57
The urgency of revision or
perhaps reform of the system is much needed with regard to the rapid rise in
investment arbitration cases. Megaregionals containing new investment standards
may be the most effective way forward. In the area of trade policy the European
53
While presenting the report from public consultation, Commissioner Malmström stated: „Furthermore,
we need to reflect upon how to address the fact that EU countries already have 1400 bilateral agreements
of this kind, of which some date back to the 1950s. The vast majority of these agreements do not
include the kind of guarantees that the EU would like to see. This will also have to be an important
element of our reflection when considering how to best deal with the question of investment protection
in EU agreements, as failure to replace them by more advanced provisions will mean they remain in
force – with all the legitimate concerns they have been raising over the last months.”
Supra
note 44.
54
The European Parliament, which is not involved in the negotiations, will have the power to veto a
final agreement. The Parliament gives its consent after the necessary preparation at committee level.
Formally its power is limited to saying yes or no to the agreement.
55
Assuming the TTIP to be a “mixed agreement” as it will probably contain provisions that fall under
Member States´ responsibility. Accordingly, individual Member States also have to ratify the agreement
alongside the EU according to their national ratification procedures.
56
Jan Kleinheisterkamp, Lauge Poulsen, Investment Protection in TTIP: Three Feasible Proposals,
GEG
& BSG Policy Brief
(December 2014), p. 2.
57
Supra
note 18, p. 121.