EU suspends U.S investment talks
Last year trade negotiations began between the EU and U.S over a new cross Atlantic free trade deal. Entitled the EU-US Transatlantic Trade and Investment Partnership (TTIP), the deal will be hugely beneficial for both Europe and America. Initial figures provided by an EU study have estimated that the EU economy could be boosted by €120bn or 0.5% of GDP, and the U.S economy by €95bn or 0.4% of GDP.
However, the European Commission has suspended talks amid concerns over the proposed investment rules. Several non-governmental organisations (NGOs) are concerned over how these rules could prevent government action when going up against the giant U.S corporations. There is also apprehension over European social protections and the acceptance of lower U.S standards.
EU Trade Commissioner Karel De Gucht said “governments must always be free to regulate so they can protect people and the environment. But they must also find the right balance and treat investors fairly, so they can attract investment… Some existing arrangements have caused problems in practice, allowing companies to exploit loopholes where the legal text has been vague.”
Ten European NGOs have drawn up a joint statement called the “Investor-State Dispute Settlement (ISDS)”. This voices their concern that the new investment rules over environmental or health legislation could negatively affect multinationals and investors’ business ventures, forcing them to sue EU member states.
Creating opportunity for lengthy and expensive lawsuits with U.S companies is not something the trade deal wants to do and so a compromise must be found to placate both sides. Other aspects of the trade deal will continue to be negotiated but the Trade and Investment Partnership will have to tread carefully over a myriad of problems in order to achieve a mutually beneficial agreement. If it succeeds, this will be advantageous to the EU, U.S, and global economies in the long run.