Euro MPs have called for transparent and public handling of trade disputes with the US, but they have softened their stance on much-criticised commercial courts.
The MEP panel’s report on EU-US free trade talks – called the TTIP talks – goes before the full European Parliament for a vote on 10 June.
A major European consumer group, BEUC, criticised the report, as did Green and socialist MEPs.
MEPs can veto an EU-US trade deal.
The stakes are high in TTIP – it could create the world’s biggest free trade zone, giving a much-needed boost to business on both sides of the Atlantic.
The parliament’s trade committee passed the package of recommendations by 28 votes to 13 on Thursday. A German Social Democrat, Bernd Lange, was the lead MEP who drafted report.
The American Chamber of Commerce in the EU called the report “a significant positive step of support towards the trade deal” and noted the EU’s “commitment to transparency and democratic principles as key elements”.
One of the most controversial aspects of TTIP is the investment rules. It remains unclear whether a foreign investor would have access to a system known as investor state dispute settlement, or ISDS.
Critics say ISDS tribunals lack transparency and can give too much leverage to powerful corporations in disputes with states.
The original draft of the MEPs’ report said fair, non-discriminatory treatment of foreign investors “can be achieved without the inclusion of an ISDS mechanism – such a mechanism is not necessary in TTIP given the EU’s and US’ developed legal systems”.
However, a later amendment dropped that mention of ISDS. It called simply for investment cases to be treated “in a transparent manner by publicly appointed, independent professional judges in public hearings”, with respect for national courts’ jurisdiction.
BEUC said that “deplorably” the MEPs “took a very ambiguous stance” on ISDS. “We have yet to see any facts justifying its inclusion in an EU/US trade deal. We hope MEPs when voting in plenary will demand the exclusion of this outdated, discriminatory and unneeded mechanism.”
And a leading Green MEP, Yannick Jadot, said the report “does not reflect the ever growing concern among the public and civil society with the TTIP negotiations and their overt corporate agenda”.
But British Labour MEP David Martin praised the report’s demand for “strong protection of labour and environmental rules” and “bringing an end to secret investor tribunals”.
The MEPs’ views influence the European Commission’s stance in the wide-ranging trade talks, covering issues such as food safety, data protection, trademarks and competition in transport and public procurement.