What should we think about the inclusion of an Investor State Dispute Settlement mechanism (ISDS) in the planned Transatlantic Trade and Investment Partnership?
Although 93% of bilateral investment treaties contain an ISDS mechanism, this issue has caused much concern in Europe.
Shedding light on this debate, Elvire Fabry and Giorgio Garbasso begin by taking stock of the use of ISDS in the world and in the transatlantic sphere over the past 50 years.
These mechanisms were introduced by Europeans in the 1960s, and it is Europeans who have made the most use of them. However, the rise in the total number of disputes over the past ten years has led certain States to change their strategies.
The researchers present a careful analysis of the arguments in the present debate.
1. On one hand, the business world defends the benefit of such an instrument in attracting FDI, because it guarantees a safe and predictable legal framework and depoliticised dispute settlement.
2. On the other hand, its detractors consider the instrument to be illegitimate or unnecessary in the TTIP framework and esteem that it will infringe on the legislative capacity of sovereign states.
3. Finally, the negotiators seek to accommodate these different positions while keeping in mind the geostrategic interest of including an ISDS in TTIP.
The devil is in the details of these various issues. We must seek out arguments that seek to develop alternatives to – or that adapt– ISDS’ model.