Proposed Investor Court Might Save EU-U.S. Trade Deal In European Parliament


The president of the European Parliament has urged lawmakers to support a trade deal between Europe and the United States, telling them that setting up a new European court to settle trade disputes could overcome public resistance to the accord.

Europe’s assembly is divided over whether to approve the proposed pact, which would be the world’s biggest. It fears U.S. multinationals will use private arbitration, which the agreement provides for, to challenge European food and environmental laws on grounds they restrict commerce. A vote is expected on July 8.

Martin Schulz, a German socialist who heads the 751-seat parliament, has proposed a compromise seen by Reuters: A “new system for resolving disputes between investors and states” in which “publicly appointed, independent professional judges in public hearings” mediate the disputes.

That echoes a Franco-German proposal for a permanent European court to settle disputes in international trade agreements. The European Commission, which handles trade issues for the 28-state EU, has suggested a multilateral court, although lawmakers say that may take too long to set up.

Negotiations on the Transatlantic Trade and Investment Partnership (TTIP), which would encompass a third of world trade, are already under way. But the parliament has the power to reject any final deal and must set out its position during the process.

The compromise proposed by Schulz will now be put to the full European Parliament in Strasbourg in a week’s time after a previous resolution failed to come to a vote in June.

The difficulty in agreeing on what is essentially a non-binding resolution underscores the resistance to TTIP in some parts of Europe. Far-left, far-right and Green lawmakers are determined to block any pact containing investment arbitration, which the United States says must be in any final deal.