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The proposed free trade agreement between the US and Europe (TTIP) causes concern about the European right to self-determination. The most controversial part of TTIP is ISDS: investor-state dispute settlement. ISDS will make it possible for companies to sue governments that damage their investments. But is this arbitrage system where a few investment lawyers decide over billions of taxpayers money a protection of our business interests, or a threat to our democracy?
On Saturday, October 10, tens of thousands of European citizens took to the streets, and more than 2.5 million signatures were offered to the European Commission. The source of this concern and protest is the free trade agreement TTIP (Transatlantic Trade and Investment Partnership) between the United States and the EU, which would create the world’s largest free-trade zone. According to the Dutch Minister for Foreign Trade Lilianne Ploumen, TTIP could be realized as soon as 2016; the negotiations are well under way. If the EU ratifies the trade agreement, critics fear that the scales will tilt toward North-American standards and values with regard to (food) safety, workers’ and consumer rights. And that when it comes to important collective achievements and protection of its citizens, Europe will give up its right to self-determination.
The part of the trade agreement that’s questioned the most is ISDS, or investor-state dispute settlement, which can be used by companies to dispute a country’s laws and rules, if a company feels unfairly treated. This will enable multinationals to circumvent democratic decisions and existing national jurisdiction. In order to understand the potential consequences of this, VPRO Backlight traveled to Canada, which became one of the most sued countries in the world after it entered into a trade agreement with the US. American companies now summon the Canadian government to appear before an arbitration tribunal if they feel that Canadian rules aren't in compliance with the free trade agreement Nafta. Despite democratic decisions against fracking under Canada's most important river, the Saint Lawrence, the Canadian government was sued for millions of dollars by the oil and shale gas company Lone Pine
Could this happen in the Netherlands as well? In spite of resistance, the Dutch Minister of Economic Affairs Henk Kamp (VVD) doesn’t rule out the possibility of future fracking in the Netherlands. VPRO Backlight probed the opinions at an information meeting organized by the Dutch Oil and Gas Company in Saaksum, Groningen. The locals there seem more and more convinced that fossil fuels should stay where they are: underground. But then no profit would be made from them anymore. The question is if this could result in ISDS claims in the future. Or should we welcome ISDS? Because it’s also crucial for the position of the Netherlands as a world leader in legal and financial services. It will protect the tens of billions of Dutch foreign investments.
British Korean economist Ha-Joon Chang wonders what free trade really means in this day and age. Because there has long been a largely free movement of goods between the US and EU, with few tariff walls. So whose interest will the controversial TTIP and ISDS serve then? And in the service of whom or what is the law, when it comes to international investment arbitration? Isn't in the end, might right?With: Steve Verheul (Canadian negotiator for the trade agreement between Canada and the EU), Gus van Harten (Canadian lawyer and ISDS expert), Nikos Lavranos (former negotiator for the Netherlands, currently ISDS investment consultant) and Ha-Joon