Policy Brief: Investment Protection in TTIP: Three Feasible Proposals

Title: Investment Protection in TTIP: Three Feasible Proposals

Authors: Jan Kleinheisterkamp and Lauge Poulsen

Investor-state dispute settlement (ISDS) through international arbitration has become a major stumbling block in negotiations of the Transatlantic Trade and Investment Partnership (TTIP). In agreements with Canada (CETA) and Singapore, the European Commission has included several modifications to the ‘traditional’ investment provisions found in the bilateral investment treaties of European capital exporting countries, so as to address some of the shortcomings of the traditional ISDS system. Yet, a large number of stakeholders remain unconvinced that the changes sufficiently safeguard policy space in Europe. 

Broader political support for TTIP may be difficult unless these concerns are addressed. To contribute to this debate, this brief proposes three pragmatic solutions for the investment protection chapter in TTIP, which could be politically acceptable in Europe while still offering meaningful investment protections. 

The European Commission and the Member States should: 

  1. Insert and make applicable the fundamental principle framing the mandates on both sides of the Atlantic that TTIP will not include greater substantive investor rights than those enshrined in domestic laws. 
  2. Consider limiting dispute settlement to state-to-state consultations and arbitration, as this is standard in investment treaties among countries with developed legal systems. 
  3. If ISDS is included: condition it to a local litigation requirement; allow the parties to filter out disputes from arbitration; allow the parties to make binding interpretations; and implement an efficient appeal mechanism.