January 21, 2014 - 18:58 AMT
PanARMENIAN.Net - The European Union announced Tuesday, Jan 21, a partial suspension of the free trade negotiations with the United States to hold a three months-long public consultation due to worries about some of the deal's proposed rules for investment, the Associated Press reports.
Non-governmental organizations, lawmakers and some officials have voiced unease over what they say are loopholes in the proposed rules on investment that might expose governments to lawsuits by multinational firms.
"I know some people in Europe have genuine concerns about this ... now I want them to have their say," said EU trade chief Karel De Gucht. The consultation period will start in March with the goal of creating a "more transparent and impartial" system.
A broad EU-US trade deal could provide a boost to growth and jobs on both sides of the Atlantic by eliminating tariffs and regulatory barriers that are hampering business. The trade volume in goods and services between the two economic giants — representing almost half of global output — totaled 800 billion euros ($1.1 trillion) last year.
The suspension won't derail the overall negotiations that officials hope to conclude by the end of the year, according to the EU Commission, the 28-nation bloc's executive arm. The next high-level meeting in the talks is planned for mid-February in Washington, followed by a new negotiation round in March, both of which will go ahead as planned, said spokesman John Clancy, the AP says.
The part of the free trade deal that is being contested is a provision that would allow investors or multinational firms to bring arbitration claims against a state when the country is alleged to have broken the pact's investment guidelines.
"Accepting (that) would mean opening the door for big corporations to enforce their interests against EU legislation," warned Bernd Lange, a center-left lawmaker in the European Parliament. "This would deprive states of crucial policy space in important fields such as health or environment."
The Commission maintains that the current patchwork of mostly bilateral agreements between the U.S. and European countries leaves EU nations more vulnerable to such corporate claims than they would be with a tightly formulated free trade pact.
"I have been tasked by all EU member states to work on improving the system to stop potential legal loopholes being used for frivolous claims against the state whilst preserving fair and balanced investment protection for companies," De Gucht said in an explanatory letter to European trade ministers obtained by the Associated Press. "We want — once and for all — to prevent potential abuse of the investment system in the future through new, modern, transparent state-of the-art investment arrangements," he wrote.
U.S. President Barack Obama and European heavyweights like German Chancellor Angela Merkel have been pushing for a swift and ambitious free trade agreement, the so-called Transatlantic Trade and Investment Partnership, or TTIP. The goal of reaching a broad agreement by the end of the year, however, is considered highly ambitious as significant hurdles remain on issues like agriculture, industry regulation and other fields.