Playing nicely

LINKING America and the European Union in the world’s largest free-trade area could, according to an independent study for the European Commission, add more than €200 billion ($224 billion) to economic output on both sides of the Atlantic. In the overall scheme of things, therefore, one of the biggest obstacles to the Transatlantic Trade and Investment Partnership (TTIP) seems a smallish detail: agreeing on what legal redress a foreign investor should have when it thinks a host country is pulling the rug from under it. Yet activists on the two sides of the Atlantic have made investor-state dispute settlement (ISDS), as it is known, the centrepiece of their opposition to TTIP and other free-trade deals.

America wants investing firms to have the right to haul states off to binding arbitration. This is not so outlandish: some form of ISDS features in most of the world’s 3,000 or so bilateral trade and investment treaties, including two the commission agreed to last year. But European politicians have delayed those. They are disinclined to let foreign profit-seekers challenge national regulations on public health, food safety, environmental standards and the like before private tribunals manned by corporate lawyers.

In fact, more than half of such cases are heard at a centre run by the World Bank. But the number of investor-state disputes is rising. Among...

from The Economist: Finance and economics http://ift.tt/1KPa98R