American and German Unions Reject ISDS Extra-Legal Judicial Systems
Union leaders on both sides of the Atlantic have called for TTIP
negotiators to drop extra-legal arbitration systems from any future
trade deal. They believe existing judicial systems offer adequate
protection to investors. EurActiv France reports. The potential inclusion of an investor-state dispute settlement
mechanism (ISDS) in the transatlantic trade pact has sparked fiery
debate in both Europe and the US. Richard Trumka, the president of the American Federation of Labour
and Congress of Industrial Organisations (AFL-CIO), the largest trade
union in the US, and his German counterpart Reiner Hoffmann, the
president of the Confederation of German Trade Unions (DGB), joined
forces at the OECD forum in Paris this week to call on US and EU trade
negotiators to abandon all dispute settlement mechanisms.
The investor-state dispute settlement mechanism currently under
negotiation would allow investors to pursue governments through
international arbitration courts, rather than the national courts. The potential adoption of this system as part of the transatlantic
trade and investment partnership (TTIP) between the United States and
the European Union has provoked outcry from several member states,
including Germany and France, the European Parliament and civil society
An unnecessary system
The American trade union leader pointed out that "according to the
American chamber of commerce, $4200 billion of transatlantic investment
has already taken place without an investor-state dispute settlement
Reiner Hoffmann added that "there is no need for an arbitration
system". He also highlighted the public opposition of Germany’s Minister
for the Economy and Energy Sigmar Gabriel to ISDS.
"Countries should be free to carry out their public services however
they like, and to change their standards without the risk of being
attacked by disgruntled investors," the German trade unionist said.
Both union presidents criticised the "very vague" notion of "fair and
equitable treatment" under ISDS. Richard Trumka highlighted the need
for a more detailed set of standards, and said that "if companies have
the right to this system, so should everyone".
The European Commission recently proposed a reform to the arbitration
system that would see an international investment court gradually
taking over from the current system.
France recently submitted a similar proposal, advocating the creation
of a European dispute settlement court before developing an
"These systems are not necessary because our respective judicial
systems are already strong enough. We do not need an additional system
of investor protection," Richard Trumka said.
En route to an agreement
The two union leaders also expressed their concern that regulatory
harmonisation between the United States and the European Union could end
up lowering standards across the board.
"We are determined to work hand in hand to block any regulation that
could damage workers’ rights on either side of the Atlantic," Richard
"We have asked the current Commission to adopt a different strategy
to the one taken by the previous Commission. We want to see them take
advantage of the opportunity presented by these negotiations with the
United States to push for fairer trade regulations," Reiner Hoffman
"This means that in any kind of trade negotiation, the rights of
workers and human rights in general should be taken into account."