Activity Heats Up Around Investor-State Dispute Settlement

Cecelia Malmstrom, EU Trade Commissioner
Cecelia Malmstrom, EU Trade Commissioner

Investment protections and especially Investor-State Dispute Settlement (ISDS) arbitration have emerged as a controversial and hotly debated provision of the Transatlantic Trade and Investment Partnership (TTIP) negotiations underway for nearly two years between the United States and the European Union. Criticism by anti-trade activists of ISDS has been intense in Washington, Brussels and around Europe where trade has not previously been as controversial or politicized as in Washington.

“New EU Trade commissioner Cecelia Malmstrom find herself in the spotlight, trying to walk a twisted tightrope with very challenging strands of political, ideological, and even a few substantive elements,” said Shaun Donnelly, USCIB’s vice president for investment and financial services. “She has her hands full.”

TTIP is a free trade agreement being negotiated by the United States and the European Union which, if agreed, is expected to create jobs and grow the economies on both sides of the Atlantic. ISDS is a legal instrument that allows investors to file claims against a foreign government.

Before unveiling to EU Trade Ministers and the European Parliament this week, Commissioner Malmstrom was in Washington on Monday to huddle with USTR Michael Froman, consult on the Hill and deliver a public speech at the Center for Strategic and International Studies. During the discussion at CSIS, ISDS figured prominently, with Malmstrom only hinting generally at approaches she would be proposing this week in Brussels.

“The Commissioner’s performance at CSIS was quite impressive but there are still more questions than answers on how the EU and the U.S. will handle ISDS in TTIP,” said Donnelly. “USCIB will continue to lead business communicate advocacy on both sides of the Atlantic for a strong Investment Chapter, including strong ISDS provisions, at the heart of TTIP.”

USCIB and member company representatives attended a panel at the Center for Strategic International Studies (CSIS) on May 5 where Malmström spoke about the European Commission’s proposal to revamp ISDS. Prior to Malmström’s speaking engagement at CSIS, Donnelly participated in an informal briefing for Congressional staff with Linda Dempsey (National Association of Manufacturers) and Scott Miller (CSIS) under the auspices of the Congressional TTIP Caucus.

USCIB has long been strongly advocating for investment protections in TTIP and America’s other trade agreements. Last week, USCIB joined over 60 business associations urging Congress to include investment protections, particularly investor-state dispute settlement (ISDS), in Trade Promotion Authority legislation. USCIB staff also made a strong business case for ISDS at speaking engagements at a TTIP stakeholders forum in New York on April 23, and at a seminar on Transatlantic energy issues in Washington, D.C..

In addition, earlier last month Eva Hampl, USCIB’s director for investment, trade and financial services, spoke on a panel on The Impact of Investor-State Dispute Settlement (ISDS) in TTIP at an International Investment Symposium hosted by the International Chamber of Commerce Young Arbitrators Forum, where she emphasized the importance of investment with Europe, since the EU-U.S. trade relationship is the largest in the world.

Read a new Congressional Research Service report on U.S. investment agreements.

Donnelly, a retired State Department Economic Officer/former Ambassador/former USTR trade negotiator, has, over the last 18 months, done five TTIP and ISDS public speaking tours around Europe for the State Department and U.S. embassies.  Donnelly is headed to Barcelona and Madrid in late May to carry USCIB messages on TTIP, investment, and ISDS.

Staff Contact:   Alice Slayton Clark

Director, Investment, Trade and China
Tel: 202.682.0051

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