European Parliament backs key TTIP compromise

Critics of a disputed investor court causes a delay in Parliament’s TTIP blessing.

After months of fighting, the European Parliament voted to back a compromise on the most controversial piece in Europe’s evolving free trade pact with the U.S., while also giving its blessing to the future of the talks.

The Parliament on Wednesday voted, 447-229, to green-light a proposal to revamp a disputed investor court, which would be part of the Transatlantic Trade and Investment Partnership, the giant trade deal still being negotiated.

A broader resolution on the trade pact also passed with 436 in favor and 241 against.

Parliament approval is not essential at this stage, but it is considered vital later, since it will eventually have to give final approval to the trade pact.

A key issue in the talks are arbitration courts common in some trade deals that allow foreign investors to sue national governments over losses, referred to as the Investor State Dispute Settlement provision.

Left-leaning critics have blasted the panels as a sop to corporations, and opposition from many MEPs led Parliament President Martin Schulz to pull a vote on the deal last month.

“The reasonable option has finally prevailed,” Daniel Caspary,  a member of the European People’s Party and one of the rapporteurs, said in an interview. “I am happy that we have found a broad consensus.”

Several members of the Progressive Alliance of Socialists and Democrats, the second largest political group in the assembly, said they had voted against the text, including Belgian MEP Maria Arena.

“Despite all the amendments submitted to reinforce it, the resolution goes only half way because it doesn’t give any guarantee to the citizens and it sends a blurred message to the Commission,” she said.

The text approved proposes to “replace the ISDS system with a new system for resolving disputes between investors and states.”

The clause was promoted to get the possible largest consensus within S&D, since it explicitly rejects the older version of the scheme, as requested by hardliners, while keeping the door open to an international trade court.

It is similar to the one adopted by the Parliament’s International Trade Committee in May, moving towards the idea of an international tribunal as envisaged by the French and German governments. The idea is broadly in line with one pitched by EU Trade Commissioner Cecilia Malmström.

“What today’s vote signals is that the old system of investor-state dispute settlement should not and cannot be reproduced in TTIP — Parliament’s call today for a “new system” must be heard, and it will be,” said Malmström.

Efforts to reach a compromise were stalled in recent weeks because members of the assembly’s two largest political blocs, the S&D and the European People’s Party, struggled to keep together a fragile deal.

On Wednesday, Schulz paid tribute to a vote which he said “gives a much-needed renewed impetus to transatlantic negotiations.”

The next round of negotiations over TTIP is scheduled for July 13-17 in Brussels.

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