EU-Australia FTA talks have quietly dropped ISDS

23 May, 2018: SBS news reported yesterday that the European Union has authorised negotiations for a free-trade agreement (FTA) between the EU and Australia, as well as the EU and New Zealand. Australian Trade Minister Steve Ciobo told SBS News that he hopes the FTA negotiations will commence ‘very soon’. 

The EU Commission first flagged the FTA negotiations in September 2017. Yesterday it issued a press release welcoming the commencement of the negotiations. 

Neither the EU not the Australian government has mentioned that the mandate for negotiations does not include the controversial rights for foreign investors to bypass national courts and sue governments in international tribunals, known as investor-state dispute settlement (ISDS). Two recent EU legal decisions give context for this omission. In May 2017, the Court of Justice of the European Union (CJEU) determined that provisions in ISDS must be voted on by all EU Member States. The EU fears that popular opposition to ISDS could lead to rejection of agreements. And in March 2018, the European Court of Justice ruled that ISDS between two EU member states was incompatible with EU law, as it undermined sovereignty. The EU has now adopted a “fast track” strategy which leaves out ISDS. 

The silence about the lack of ISDS in the EU talks may be due to the fact that despite mounting evidence against ISDS, Australian government is persisting with its inclusion in the TPP-11 and other agreements. See AFTINET media  release here.

AFTINET will be monitoring the EU negotiations which include trade in goods, services, agriculture, e-commerce, intellectual property and government procurement.