CYIL 2015

TTIP AND ISDS: NOT IRRECONCILABLE ACRONYMS agreements provide guarantees to help assuage investor’s concerns and reduce the need for other inducements to attract foreign capital.” 17 As inflow of foreign direct investments into developed economies and particularly the EU has steadily decreased after the sharp fall in 2012, the latest recovery does not help to raise its historically lowest share in global terms (39%). 18 Besides, European flow of outward and inward FDI remained at barely half the peak level seen in 2007, 19 and the US and the EU combined saw their share of global FDI inflows cut nearly in half over the past seven years. 20 Despite this recent decline of the share of transatlantic FDI flows in recent years, 62% of inward US FDI stock is held by EU countries, and 50% of outward US stock is located in the EU. EU countries are still major investors in the US. Their combined investments in the US top €1.6 trillion, making the EU the biggest investor in the US. Therefore, from the perspective of the EU, ensuring European investments abroad receive the best possible protection, which is an essential aim of the TTIP. 21 On the other side of the pond, the US accounts for one third of outward EU FDI flows. 22 Obviously, the TTIP has the potential to bring significant benefits in trade and investments to both sides of the Atlantic, and the current investment relationship between the two economic powers is the most convincing argument against the risk of increased ISDS litigation. 23 Are risks real or exaggerated? Various stakeholders question the real positive impact of the investment chapter in the agreement on increased foreign investment from the US, despite the fact that the EU and the US are mutually desired investment partners. They particularly single out possible costs and risks, such as a reduced policy space and a threat of expensive litigation, and saying that the TTIP will just provide a platform for multinationals corporations “to engage in litigious wars of attrition to limit the power of governments on both sides of the Atlantic.” 24 The author must agree with Quick that perhaps the central claim against ISDS is that “the state deprives itself of its regulatory autonomy 17 Jessi Patton, A Case For Investor-State Arbitration Under the Proposed Transatlantic Trade and Investment Partnership, Arbitration Brief , Vol. 4, No. 1 (2014), p. 86. 18 UNCTAD, World Investment Report 2014: Investing in the SDGs: An Action Plan, United Nations (2014), p. XIV. 19 Supra note 18, p. XXI. 20 Supra note 18, p. 5. 21 European Commission, The Transatlantic Trade and Investment Partnership (TTIP): TTIP Explained, p. 3 (19 March 2015), see http://trade.ec.europa.eu/doclib/docs/2014/may/tradoc_152462.pdf. 22 Supra note 18, p. XXII. 23 Supra note 17, p. 83. 24 Corporate Europe Observatory, ATransatlantic Corporate Bill of Rights: Investor Privileges in the EU-US Trade Deal Threaten Public Interest and Democracy (October 2013), p. 3, see http://corporateeurope. org/sites/default/files/attachments/transatlantic-corporate-bill-of-rights-oct13.pdf.

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