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US backs existing arbitration procedures for foreign investors
[PARIS] A senior US official on Monday defended current mechanisms in place to resolve disputes with foreign investors, amid EU calls for the creation of an investment court in a bid to resolve a controversial issue holding up a massive EU-US free trade deal.
The EU's trade commissioner Cecilia Malmstroem last week proposed creating an international investment court to allay concerns among Europeans that the arbitration panel foreseen in the deal would effectively allow companies to bypass national courts if they feel their investments are under threat.
However US Undersecretary for International Trade at the Commerce Department, Stefan Selig, said numerous so-called Investor-State Dispute Settlement (ISDS) mechanisms already exist in international trade agreements and had not resulted in a loss of sovereignty for countries.
"The criticisms that they undermine governments' right to regulate, I think are just misguided," Selig said during a visit to Paris when asked about Malmstroem's proposals.
"They're about enforcing rights for all of our companies, US companies and European companies abroad." Selig said the United States believes the ISDS mechanism "increases the security of companies willing to make investments and arguably makes that country, whether it's the United States or any country in Europe, a more attractive investment destination."
A US Commerce Department official told AFP later on Monday that Selig's remarks did not mean he rejected the EU's proposal "as he has not seen the proposal in order to offer a view or speak to the merits of any such proposal".
Malmstroem's proposals included making the ISDS arbitration tribunals more like traditional courts, with a view to eventually setting up a permanent international investment court.
The EU-US are unlikely to meet a year-end deadline to wrap up talks on their free trade deal, which is called the Transatlantic Trade and Investment Partnership.
If concluded, TTIP would be the world's biggest trade deal, linking about 60 per cent of the world's economic output in a colossal market of 850 million consumers, creating a free-trade corridor from Hawaii to Lithuania.
Selig is set to hold talks in Brussels on Tuesday.