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The European Union announced Tuesday 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.
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 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.”