CYIL 2015

TTIP AND ISDS: NOT IRRECONCILABLE ACRONYMS Nevertheless, it is true that, in spite of a good effort to dispel widespread fears, the European Commission does not help its cause by emphasizing the necessity of reinvention of the system to make it credible and dismissing those rules already in place. 53 This message does not reflect the true state of the investment arbitral system. Given the growing opposition and ISDS “under siege”, the European Commission struggles to defend its policy and demonstrate possible advantages lead to serious doubts over the TTIP’s ambitions in investment protection. On the EU side, the TTIP requires ratification in the European Parliament 54 as well as all 28 national parliaments. 55 Therefore, in order to pass 29 highly politicized tests, the European Commission can play safe and give up ISDS or the whole investment chapter in the TTIP. Under these circumstances Kleinheisterkamp and Poulsen advise that the exclusion of investment protection from TTIP “would allow European policy-makers to pause and rethink both the substantive and procedural rights in investment treaties “bottom up”. Much work needs to be done to assure the consistency between investment law, on the one hand, and EU law and national law of the member states, on the other hand.” 56 Indeed, the complexities of the relationship between investment and EU law needs to be resolved urgently; however, this may prove difficult since the relationship has always been idiosyncratic. These legal systems are “work in progress”, permanently developing and searching for an idealistic solution for their relationship. It would be unreasonable to postpone negotiating investment protection issues in European free trade agreements. Offering opportunities for consolidating today’s treaty network, megaregional agreements such as the TTIP or CETA may have significant implications for the whole system of international investment treaty law. 57 The urgency of revision or perhaps reform of the system is much needed with regard to the rapid rise in investment arbitration cases. Megaregionals containing new investment standards may be the most effective way forward. In the area of trade policy the European 53 While presenting the report from public consultation, Commissioner Malmström stated: „Furthermore, we need to reflect upon how to address the fact that EU countries already have 1400 bilateral agreements of this kind, of which some date back to the 1950s. The vast majority of these agreements do not include the kind of guarantees that the EU would like to see. This will also have to be an important element of our reflection when considering how to best deal with the question of investment protection in EU agreements, as failure to replace them by more advanced provisions will mean they remain in force – with all the legitimate concerns they have been raising over the last months.” Supra note 44. 54 The European Parliament, which is not involved in the negotiations, will have the power to veto a final agreement. The Parliament gives its consent after the necessary preparation at committee level. Formally its power is limited to saying yes or no to the agreement. 55 Assuming the TTIP to be a “mixed agreement” as it will probably contain provisions that fall under Member States´ responsibility. Accordingly, individual Member States also have to ratify the agreement alongside the EU according to their national ratification procedures. 56 Jan Kleinheisterkamp, Lauge Poulsen, Investment Protection in TTIP: Three Feasible Proposals, GEG & BSG Policy Brief (December 2014), p. 2. 57 Supra note 18, p. 121.

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