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EXCLUSIVE/ The European Commission faces an EU court battle to keep secret its lawyers’ analysis on whether the controversial investor-state-dispute (ISDS) clause in draft trade deals with the USA and Canada is illegal.
ClientEarth, an NGO of environmental lawyers, has slapped the Commission with a lawsuit after applying for the legal opinion using EU transparency rules.
It received heavily redacted documents that make it impossible to see the analysis of whether ISDS is legal under EU law. The redactions will be embarrassing for an institution that regularly claims to be the most transparent in the world and far more so than national governments.
ISDS is controversial because critics argue it will allow powerful multinationals to sue governments in international tribunals, which can have a chilling effect on their willingness to regulate in the public interest.
The Commission claims that the black-out is needed to protect its negotiations with the US on the Transatlantic Trade and Investment Partnership (TTIP) but that will now be tested by judges in the EU’s General Court in Luxembourg. The executive is mandated by member states to handle free trade agreement talks.
The CETA deal with Canada, facing some opposition in national parliaments, also has an ISDS clause
The Court must hold a hearing and decide whether to annul the decision to refuse access to the requested documents. If it loses, the Commission will be compelled to reconsider its decision, be barred from using the same arguments to refuse access, and pay litigation costs.
Were the Commission to be ultimately forced to publish analysis that found ISDS was incompatible with EU law, it could call the much-debated TTIP deal into question.
A legal precedent would also be set but the Commission would be able to appeal any decision to the European Court of Justice, which has so far resisted calls to issue an opinion on the clause’s legality.
EU officials have told EurActiv that trade deals between the bloc and non-EU countries would not result in international tribunals interpreting or applying EU law, but rather on the provisions of the free trade agreement (FTA) itself.
“Hence, investment dispute settlement provisions in EU trade agreements with third countries are entirely consistent with EU law,” one official said.
>>Read: Whole story on EurActiv
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