Today the European Court of Justice (ECJ) gave an important boost to the case for scrapping Investor State Dispute Settlement, as well as other corporate court systems like it, in trade agreements.
Part of the ECJ’s ruling today was that trade deals that contain ISDS need to be ratified in EU member countries as well as European level. This means they have to be approved by the 38 parliaments that govern at regional and national level in EU states.
The ruling was on the EU-Singapore agreement but is so significant because it will apply to all future EU trade deals.
It seems likely that coming under additional democratic scrutiny will make trade agreements containing ISDS more likely to fail.
Due to trade union and civil society campaigning, criticism of the dangers of ISDS – which allows international investors to bypass domestic legal system to claim ‘compensation’ for laws that threaten their profits – have been raised in parliaments in many EU countries.
Most widely publicised was the concerns raised by the regional parliament of Wallonia in Belgium which delayed CETA going before the European Parliament for months.
Today’s court ruling adds to the reasons why the UK government should not include ISDS in our future Brexit deal with the EU or any with other country.
As unions have been saying for years, ISDS and similar courts such as the Investment Court System in CETA are bad for workers, public services and democracy itself. ISDS-style courts have been used by international investors in the past to challenge minimum wage laws, plain cigarette packaging and the way governments regulate health services.
ISDS should have no place in any future deal between the UK and EU or any other country.
TUC General Secretary Frances O’Grady said: “The court’s decision makes clear that every EU nation has sovereignty over this core issue for Brexit negotiations. That could make ISDS a non-starter. So the sensible approach for the next government is to rule out the idea of ISDS, and to concentrate on a deal that has working people’s jobs and rights at its heart.”
Rosa Crawford is the TUC’s policy officer for International Relations and European Union. This article first appeared on the TUC Touchstone blog. Copyright © 2017 ToUChstone, Trades Union Congress.