In Mr. Siim Tuisk’s op-ed in Postimees «Anne Sulling, to whom do we owe?», published on October 30, he raised questions about the Transatlantic Trade and Investment Partnership (TTIP) and Investor-State Dispute Settlement (ISDS) provisions and asked to hear differing points of view. I’d like to offer that as part of the public discussion on a very important issue.
First, let me provide a brief background on T-TIP, which is an ambitious effort to create even closer economic links between the United States and the European Union. According to economic studies, trade between the EU and United States supports about 13 million jobs. T-TIP could add hundreds of thousands more and increase our GDP by tens of billions of dollars. And unlike what was suggested by Mr. Tuisk, the main beneficiary would be small and medium sized enterprises. As Estonia has demonstrated, small businesses are drivers of innovation, employment, and growth. They are a powerful economic force, but they sometimes lack the resources of large firms in addressing complicated and differing sets of regulations that vary country by country. A successful TTIP will reduce existing barriers for small businesses to enter new markets.
Second, it is simply not true that T-TIP would lead to lower health and safety standards. The U.S. approach to developing regulations and standards in T-TIP is guided by the principles of increased transparency, participation and accountability by regulators and standard-setters. We want to achieve better, less divergent regulations that are consistent with high levels of consumer, safety and environmental protection.
Third, regarding ISDS, neither the U.S. nor the EU has any interest in doing anything in T-TIP which would prevent governments from regulating in the public interest. Investment protections are designed to promote standards of fairness, not protect profits. They’re intended to safeguard against abuses, even as we fully preserve our ability to regulate for the protection of public health, safety and the environment.
It is worth noting that EU member state countries have some 1400 investment protection agreements in place. In addition, investors from the EU have been the biggest users of the dispute settlement procedures - according to UN Conference on Trade and Development (UNCTAD) figures, EU corporations were behind 60 percent of all cases in 2012, while U.S. investors accounted for only 8 percent.
Mr. Tuisk understandably also asks why ISDS is needed in an agreement between two highly developed economies. And I’d answer by saying they have become an important component of any trade agreement. In addition to the immediate benefits, the U.S. and EU would like TTIP to serve as an international model. Dependable, independent dispute resolution mechanisms are an essential element of the rules-based international trading system supported by TTIP.