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Fears Over U.S. Influence Over EU Policies and Lack of Arbitration Transparency Fuel Opposition to Trade Deal

Saturday, January, 24, 2015

The troubled Transatlantic Trade and Investment Partnership (TTIP) trade agreement between the European Union and the United States got even more troubled as opposition increased over fears that the arbitration mechanism included in the agreement would unduly favor corporations in the United States and allow them to compel the EU to allow things like genetically modified foods to be imported despite EU laws against such policies.   


The EU had created an online consultation in order to appease those opposed to the trade agreement, thinking that it would quiet opposition and give it a better negotiating position with the U.S.  But the move backfired as more than 150,000 comments – almost uniformly opposed to the agreement, were filed, although some have noted that more than half of those comments come from a single organization that sent pre-written comments to its members.  At issue is the investor-to-state dispute settlement (ISDS) arbitration process included in the trade agreement.  There are fears the U.S.   companies will use it as a cloaked way of re-writing laws in the EU they do not like.   


There is precedent for this fear; A U.S. tobacco company recently used an ISDS process to successfully challenge cigarette packaging laws in Australia.   


In the meantime, the European Commission has paused negotiations with the U.S.  The TTIP deal cannot proceed, however, until negotiations are re-opened and the ISDS issue is settled.  Solutions regarding making the arbitration process in TTIP much more transparent and less secretive have been floated, but no specific language has been offered yet.