EU to Seek Views on Dispute Settlement in U.S. Trade Deal

The European Union is seeking public views on how negotiations with the U.S. should handle rules for settling disputes between investors and nations, as they are likely to remain part of a proposed free-trade accord.

The Trans-Atlantic Trade and Investment Partnership aims to include investor-to-state dispute settlement, or ISDS, procedures in its scope, since the resolution protocols are widely used in the U.S. and Europe, EU Trade Commissioner Karel De Gucht said. The EU today began a three-month public consultation on the issue, which determines when a company can sue a government for breaking trade rules.

De Gucht said the EU wants to redesign the dispute-settlement process to close loopholes and limit its potential for misuse. Dropping it from the trade deal altogether could sink the talks and also might open the door for companies to exploit the same kinds of procedures from other locales.

“It would not put necessarily the American companies, the corporations that everyone is afraid of, in such a bad position, because they could incorporate somewhere else” that has ISDS agreements with EU nations, De Gucht told reporters in Brussels.

“They could simply not shoot from the hip but shoot from somewhere else,” De Gucht said. “We could not avoid that. So the better solution is to find a new framework that makes that kind of action impossible. The only way is to have a complete new approach.”

U.S. Trade Representative Michael Froman said March 22 in Brussels that the dispute-settlement procedures are a standard part of U.S. agreements. He told reporters the U.S. would welcome public consultation and declined to say whether the issue could make or break the proposed deal, which aims to lower tariffs and reduce regulatory trade barriers between the U.S. and Europe.

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Mark Williams, Eddie Buckle

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