EU must reject VIP treatment for corporations in trade deal

23rd February 2016

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Campaigners are calling on the EU to refuse trade agreements that include special rights for foreign investors.

The EU and US are in ongoing negotiations on the Transatlantic Trade and Investment Partnership (TTIP), with the latest round of talks taking place in Brussels this week.

The potential agreement has been highly controversial with campaigners, who say it would allow multinational corporations to pick and choose the weakest environmental protection rules on either side of the Atlantic, forcing the other side to lower its rules.

They fear proposed provisions, known as investor-state dispute settlements (ISDS), would allow foreign corporations to sue governments for blocking projects on environmental grounds, using arbitration tribunals not accountable to any domestic legal system and which are overseen by judges who are paid per case.

Citizens damaged by the activities of fossil fuel corporations, mining companies, banks, food multinationals or chemical producers do not have access to the same rights, meaning that foreign investors will receive VIP treatment over the rest of society, campaigners say.

A report published today by NGOs, including Friends of the Earth, Greenpeace and Transport and Environment, highlights how corporations are already using ISDS in existing trade agreements to override environmental concerns.

TransCanada, the company behind the Keystone XL pipeline project that was rejected by the Obama administration in November 2015, is using the ISDS system that exists in the North American Free Trade Agreement (Nafta) to sue the US government for more than US$15 billion for costs and loss of revenue.

The pipeline would have carried 830,000 barrels per day of tar sands crude from Alberta, Canada to the Gulf Coast of the US, where it would be refined and shipped overseas. Opposition to the project grew into an international campaign, with climate experts and economists joining indigenous leaders, farmers and ranchers.

The EU has proposed an investment court system in TTIP, but this would be operate in a very similar way to the ISDS system, campaigners say. Other companies that have launched legal proceedings under ISDS rules include chemical companies, which have challenged bans on substances suspected of harming human health and the environment, and energy and mining firms, which have had projects rejected on environmental grounds.

Campaigners believe the number of such cases could increase as a result of TTIP and similar trade deals under negotiation, including a pact between the US and Pacific countries, known as TPP, and the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Negotiations on these agreements are complete, but the deals have not yet been ratified.

As yet there is no date to complete the TTIP negotiations, although both sides are said to be aiming to reach an agreement before the US elections in November.

In November, the European commission proposed including a chapter on sustainable development, which it said would establish high standards for labour and the environment, and ensure the EU and US worked together to address challenges such as child labour, health and safety at work and protection of the environment.


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