The European Union and the Mercosur bloc of South American countries signed on Saturday signed a free trade deal that follows a quarter-century of careful negotiations. France still remains opposed to the trade agreement, with the country’s powerful agricultural lobby warning it could damage local farmers’ livelihoods.
I think this is great. Anybody know what the arbitration settled on? A major problem of the TTIP with North America was that the arbitration was shady and corporations could sue countries for public policy that hurt their bottom line (eg antismoking, fat tax). Is this addressed in the deal in a better way this time?
Kinda yes, this trade agreement does not include the kind of investor-State arbitration (ISDS) we saw in TTIP. Its dispute settlement provisions are different and do not give individual companies the right to sue a government for regulatory decisions. It’s much more like what happens in the WTO.
In fact, the treaty doesn’t even regulate investor-to-state dispute settlement between investors and states. On this topic, it just focuses on state-to-state dispute mechanisms for covered provisions, WTO style from my understanding.
The treaty discusses a rebalancing mechanism in the dispute settlement chapter. So, a party state may to take counter-measures if a covered measure by the other nullifies or substantially impairs benefits. So with this treaty, corporations have no standing to sue against national policy.
Still, any investment protections that apply for EU investors in Mercosur countries (or vice versa) will continue to derive from existing bilateral investment treaties (the BITs) between individual EU countries and Mercosur partners, not from the EU–Mercosur trade deal itself. These BITs are still valid until their expiration (if it exists), or a party terminates it. But again, these are separate treaties from this trade agreement.