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Part One: 1. The Transatlantic Trade and Investment Partnership - Part Two: 2. A new International Trade Law (?). The issue of the Investor-State Dispute Settlement (ISDS) - 3. Conclusions: a step towards an international investment court? - NOTE

Part One: 1. The Transatlantic Trade and Investment Partnership

1.1. What is TTIP and how it will influence European Union The Transatlantic Trade and Investment Partnership (TTIP) is a project that involves the European Union and the United States of America. Those two federations are discussing the preliminary version of a treaty that will be, if approved, of historical proportions. The aim of the partnership is very ambitious and it concerns the creation of a common space of investment between EU and USA, a trans-Atlantic commercial alliance that will de facto erase economic the borders between the above quoted subjects. It is important to notice the magnitude of this operation, since the volume of the trade between EU and USA covers enormous quotas of the global trade, as they account for almost 45% of the global GDP [1]. The TTIP alone will cover around 250 billion USD of FDI (foreign direct investments) either from EU to USA or vice versa [2]. Following the approval of the TTIP other aspect of the global economic assets will be influenced, as the introduction of the TTIP will increase investment in EU and USA and, consequently, generate economic growth all over the world [3]. It is important to notice that, since the parties are still undergoing discussions on the contents of the measure, the final draft may vary from what discussed in the present article. This document, thus, will take in account all the latest preparatory documents both from the US Government and the European Institutions and take in account the possibility that the final draft of the agreement will present differences from this work. Another element to take in account in order to understand the present document is the fact that the discussions between US and EU are confidential and it is not possible, since the early stage of the process, to have access to the complete preparatory works. Even with the aforementioned limitations, the article will use as a reference all the documents issued so far to understand the direction the discussions are going and the probable final results. The TTIP will undoubtedly be an agreement of historical proportions, involving the most industrialized areas of the world. In the idea of the USA, the treaty is a part of the ongoing free trade plan that lead to the signing of the TPP [4]. USA is attempting to establish free trade areas with the surrounding countries in order to cope with the competition of other countries that are menacing (or for some markets even [continua ..]

Part Two: 2. A new International Trade Law (?). The issue of the Investor-State Dispute Settlement (ISDS)

The most controversial part of the preparatory works of the TTIP concerns the investment chapter and, in particular the procedure for conflict resolution. In practice, it has been envisaged a form of investor-state dispute settlement mechanism in order to resolve conflicts between private investors and a public entity such as USA or EU (and its Member States). The worst fear concerning ISDS is the assumption of a leveling between investors and hosting States that could lead to an erosion of legitimacy by the public power against the aggressive practices of private investors. It is feared that in case of approval commercial rules will overcome public laws, thus, undermining a state sovereignty in its own territory. ISDS is a dispute resolution process that allows, after the failure of negotiations, to solve a dispute arising from the interpretation or application of a set of rules. The aforementioned dispute resolution procedure is a widespread reality, not limited to TTIP and already settled in other agreements that allows a company to sue a State for believed violations of its rights [29]. In other international treaties, there are already forms of ISDS: Chapter 11 Section B of NAFTA [30] called “Settlement of Disputes between a Party and an Investor of Another Party”, for instance, allows private companies of one NAFTA country (Canada, Mexico or USA) to file a claim against a State taking part in the agreement before going to sue it in front of an arbitral tribunal according to the international law. The aforementioned section, thus, allows the private investor to seek justice by settling “a mechanism for the settlement of investment disputes that assures both equal treatment among investors of the Parties in accordance with the principle of international reciprocity and due process before an impartial tribunal” [31]. The importance of the matter at hand pushed the EU Commission to issue a proposal for the investment protection in TTIP. This crucial issue has been already included in two other free trade agreements signed by EU, which are the CETA (with Canada) and the EU– Singapore Free Trade Agreement, that inspired EU to include a similar matter in the TTIP negotiations [32]. The key concepts defined, among others, in CETA (concerning FDIs) were the indirect expropriation and the fair and equitable treatment. In particular, for the first time CETA defines indirect expropriation [continua ..]

3. Conclusions: a step towards an international investment court?

In this last section, We will recap the consideration expressed in the previous parts of the document and conclude with come consideration on TTIP, investment arbitration and International Trade Law. In this article we analyzed the role of commerce for the consolidation international relationships and to be a potential ground for cooperation. We stressed the circumstance that without a strong law framework international commerce tends to become the turf for plunder and abuse by the most powerful nations towards the least developed ones. We also focused on the rise of the multinational companies in the international commerce panorama and the fact that these entities have nowadays reached a power sometimes far superior than States and public institutions. It is fundamental, taking in account the history of international commerce, that every important step taken by the international community is accompanied by the creation of a strong legal framework. The role of capitalism and, consequently, of companies is to maximize profits; in fact, it can be said that companies exist to gain profits and create resources. It can not be expected from companies that they voluntarily limit themselves in battle with the competition by creating rules to protect the people of the nation they are working in. This role of control and regulation have always been and must be of public institutions. The economic crisis of 2008 is the proof of the need to have a stringent discipline to ensure the protection from unfair practice by the private investors. It is fair to say that such financial crisis is a failure of regulation [51], more than a failure of the markets, pointing out the responsibilities of public bodies in the lack of control. During the current year a corporation scandal exploded and its consequen­ces are, nowadays far from over. We are referring to the “Volkswagen Emission Scandal” [52], in which was discovered that the German car manufacturer systematically altered the pollution control devices on the cars of its group (Volkswagen and Audi principally) and eluded the American EPA [53] controls [54]. This scandal proved the aforementioned point: it is necessary to create a strong and binding framework to ensure that private companies do not infringe the law to gain an unfair advantage in spite of the competition and public goods such as health and environment. It is important to notice the [continua ..]

NOTE