Court rules EU states must have say over corporate court trade deals

26 May 2017 - 11:00am

In another blow to the European Commission and a major victory for the European trade justice movement, the European Court of Justice (ECJ) again ruled against the Commission’s interests by deciding that it could not seal trade deals including corporate courts without approval from EU member states.

As has often been the case with stories on EU trade policy, there was much misunderstanding of the issue in the media. The Guardian labelled the ruling “in part a victory for EU institutions”.

The Telegraph argued that “the ECJ ruling could substantially reduce the risk of any future EU-UK free trade agreement getting bogged down in the EU national parliaments”

The Commission desperately wanted to have the power to negotiate and conclude deals including investment – that’s to say, deals including ISDS corporate courts. And with both the EU and UK championing ISDS mechanisms in trade deals, it would only ease the passage of a UK-EU trade deal if the deal doesn’t include an ISDS mechanism.

Indeed, as a former EU trade spokesman told the FT: “It simply suggests that the EU and the member states will probably be forced to carve out investment in any future EU-UK trade deal.”

Despite European Commission spin that it welcomed the ruling, anyone who has engaged on the EU trade agenda knows this to be wholly false. Indeed, the recent campaigning on CETA speaks to this truth.

In its desperation to conclude the deal as quickly as possible – and in so doing using CETA to open up ISDS to tens of thousands of US companies - the Commission wanted to pass the deal without any recourse to EU states, a move opposed by many states themselves.

Public pressure

In the end, the Commission lost as the EU’s member states decided that the deal must be voted on by national parliaments before its corporate court mechanism can be put in place. 

More than 13,000 War on Want members and supporters joined the public pressure across Europe that was central to this critical campaign win, which has helped contribute to awareness of this new, landmark ruling which may save many countries from the peril of EU trade deals with ISDS corporate courts.

Due to the extreme public, global opposition to corporate courts, the Financial Times argued in an editorial that the EU should scrap them for good: “It should ditch the whole idea of having rules on investment, or at least rules allowing companies to sue a government directly, in FTAs. Such “investor-state” provisions have attracted intense opposition, not just from the Walloons but also from anti-corporate campaigners.”

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