On November 1, a new crop of leaders will be running the executive arm of the European Union, the EU Commission.  The next president of the Commission, Jean-Claude Juncker, was approved by the European Parliament last summer.  Now the Parliament is holding hearings individually with the new slate of commissioners.  On September 29, they met with the nominee to be the next Trade Commissioner, Cecilia Malmström of Sweden.  Today's featured quote is from Ms. Malmström's opening remarks at that hearing. 

She began with a general statement on the importance of trade to the European Union - "some 30 million in Europe today ... depend on trade for their livelihoods" - and then moved to her approach to negotiations generally and to the challenges of particular initiatives.  TTIP, the Transatlantic Trade and Investment Partnership, was at the top.  "TTIP," she said, "is our most demanding negotiation, and certainly is the most debated by the public."  And no element of her comment on TTIP has gotten more attention than what she said about ISDS, Investor-State Dispute Settlement, either (we suspect) in the hearing or in the press.  We'll get to that in a moment. 

First, however, we would highlight three broader themes in her remarks: transparency, "backbone," and her approach to TTIP overall.

On Transparency, the Commissioner-designate said, "Trade negotiations should be open and transparent to allow all interested people and groups to understand what is on the table and express their views."  She said she planned to continue her practice of "publishing a large part of my correspondence with outside groups."

She underscored her commitment to transparency by telling the Parliament that "last Friday [September 26] I ensured that the entire text [of CETA, the FTA with Canada] was posted on line, on DG Trade's website."

"Backbone" was a key element in how she said she would approach trade negotiations.  Backbone, she said, "means securing reciprocal economic concessions from our negotiating partners."  And

On TTIP, she said, "I believe that we need a fresh start on the Transatlantic Trade and Investment Partnership."

On ISDS.  In her opening remarks, Ms. Malmström said, "We must continue to set unambiguous rules .... to ensure that ISDS cannot be used to inhibit the right to regulate in the public interest."  In her give-and-take with the parliamentarians, she was reportedly more pointed, describing Investor-State Dispute Settlement as having "toxic elements" and suggesting it may have to be dropped from the negotiations.

To continue the ISDS discussion, it is worth keeping in mind, as Ms. Malmström noted in her remarks, that "For the moment, the ISDS chapter is frozen."  So there are no current negotiations on ISDS.

The broader TTIP negotiations continue. The two teams held their seventh round in Washington almost in parallel with the European Parliament's session with Ms. Malmström, that is, during the week of the 29th of September.  In the middle of the week, the negotiating teams broke to meet with stakeholders, and Kathryn Hauser of Policy Connections International (PCI) participated in that discussion.  A former executive director of the Trans-Atlantic Business Dialogue and a current Trade Adviser to GBD, Ms. Hauser said she came away from the negotiations with the sense that "the negotiators have lost their way."  That's from the opening of her report on the stakeholder meeting, which is available on the PCI website.

Part of her report deals with what Ms. Malmström might refer to as a backbone issue.  Ms. Hauser writes:

We are not sure where all of this leaves us.  We suspect there will be several resets before the U.S. and the EU conclude a meaningful TTIP agreement.  The European Parliament is skeptical and the U.S. Congress, while supportive in principle, has not been able to express that support with a clear negotiating mandate - Trade Promotion Authority - for the administration.  When they do so, they might consider what their views are toward the constantly recurring phrase "to regulate in the public interest."  It may be a primary concern in Europe, but in the United States it is, or should be, secondary.  We say that because in the U.S. system the purpose of regulation is to implement law, and it is primarily for Congress and the President - not regulators - to decide what the public interest is. And they do that through law.

Finally, it seems to us that if the U.S. and the EU cannot move fairly quickly towards an agreement, then maybe the entire exercise should be frozen for a while.  Otherwise, we may reach a point where the negotiations only provide ammunition to their opponents with little encouragement for their supporters.  On this point, the misunderstandings and misinformation surrounding investor-state dispute settlement are Exhibit A.