The benefits that the TTIP will bring in to the table for both
of the signatories across the Atlantic are well documented by the
Atlantic Community. Generation of a volume trade that amounts a
USD$ 1.2 billion and the expansion of the already existing
transatlantic trade accompanied by the removal of non-tariff
barriers as well as cheaper prices for the consumers and common
standards for the producers that would give a leeway for them in
fierce global competition by declining production costs. However
the other side of the coin points to possible pitfalls for the TTIP
like a requirement for a painstaking process of harmonization of
two different legal systems and possible discords regarding the
inclusion and exclusion of some specific sectors in to the
agreement. However one of those prospective challenges has
increasingly coming to the fore and lately being discussed among
the pundits as one of the most troublesome among the others. This
is the point concerning the investor to state dispute settlements
Investor to State Dispute Settlements
The crux of the matter for the European Union is to find the
right balance between enacting laws that can safeguard the public
interest and provide protection for the investors which can easly
shy away from investment decisions unless given ironclad guarantees
for their investments by the sovereign states. However for
the member states of the European Union, this is point poses the
main problem. Given the sovereign nature of the states, the EU
member states are concerned that the well known American companies
with global clout can undermine their national sovereignty to
protect their citizens vis-a-vis such giant corporations. There is
a growing tide against the ISDS among the European public as well.
Hence the issue of ISDS seems a politically explosive one given the
public reaction it aroused in Europe.
What ISDS provides for the corporations is the right to sue
governments. If the controversial clause of the ISDS is accepted
the corporations will not only have the right to sue the
governments for any actions that can limit their "future"
profits at the national level but also at the local level. The
reason why ISDS arouses such a huge public reaction is easy to
understand. The ambiguous definitions like "future"
profits can open the way up for limitless demands on the part of
the corporations. To put things better in to perspective, one can
image what would happen if a corporation tries to block a
government measure for environmental protection based on the claim
that it will damage its potential for future profits. Given the
high level of regulations for the areas like environment,
chemicals, public health and pharmaceuticals in the European Union,
it is quite possible to see such conflicts with the corporations
seeking to ensure their "future" profits on the face of
the EU regulations.
The arbitration panels that the corporations seeking to obtain
were initially designed for the investors making worthwhile
investments in countries with biased court systems that tend to
favor national interests over the corporate ones and the countries
with a fragile framework for the rule of law. But in the case of
TTIP, the signatories are the very countries that lay the
foundations of strong rule of law not only in their own
jurisdiction but also throughout the world. Hence the argument for
weak rule of law does not apply for the case of TTIP. What is left
for the corporations to propagate for the ISDS and the arbitration
panels is the given record of the EU Court of Justice that favors
Community law over the international agreements and the
inclinations of the national courts to favor the respective
sovereigns over the corporations.
If successfully concluded, TTIP is going to bring immense
advantages for the transatlantic trade in the form of expending
trade, declining prices, removal of non-tariff barriers and
harmonization of production standards across the Atlantic. However
the crunchy issues remain to be solved in the negotiations, ISDS to
be the prime one among them. It touches sensitive nerves especially
in the European public and seen as a potential tool to undermine
already battered sovereign rights of the European nations of the EU
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