The European Union (EU) has negotiated a comprehensive trade and investment agreement with Canada, and is currently negotiating one with the United States (US). Investor-State Dispute Settlement (ISDS), a provision in most Bilateral Investment Treaties (BITs) and other International Investment Agreements (IIAs), gives investors the right to pursue arbitration with a state. The inclusion of this mechanism in both the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, and the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada has caused considerable public concern. Germany, as one of the most vocal opponents to ISDS in these trade agreements, is making headlines arguing in favor of removing ISDS provisions from the agreements, threatening the continuation of the TTIP negotiations and the ratification of the CETA. Germany has a longstanding history of negotiating BITs containing ISDS. As one of the originators of the concept, it seems surprising for many viewers to see Germany now opposing investment protection. This essay will argue that Germany is seen as opposing the inclusion of ISDS in both the CETA and the TTIP primarily because it does not want it included in the TTIP with the US. Germany’s perceived opposition to ISDS in the CETA is thereby tied to the strategically more important TTIP.
This essay is aimed to be part of a larger research effort designed to look at the transatlantic investment protection and ISDS debate. What are the pros and cons of investment protection? Is it a necessary component of transatlantic trade and investment agreements? Could the CETA and the TTIP play a role in setting global, more modern investment protection standards? Examining these possible factors of why the US, Canada and the EU behave the way they do with respect to this debate and casting them against some of the facts of how ISDS works and some of the rulings that have been made with respect to ISDS in the past, future research as part of an PhD hopes to contribute to the larger scholarship on foreign direct investment and the direction thereof. Any suggestions, comments and feedback with respect to either this paper or the intended future research in terms of designing a research proposal for possible PhD applications are welcome
