Emanuela Matei, Horia Ciurtin, Turning Enemies into Adversaries – TTIP Negotiations and the Quest for a New Westphalia Momentum, The Turkish Commercial Law Review, Volume 2, Issue 1, Summer 2016
CEILA Key Note Series: Emanuela Matei and Horia Ciurtin, School of Law, Queen Mary University of London, 28 January 2016
In a world that shifts from territoriality to functionality, the Westphalian state continues to occupy a crucial position, even if nowadays the territorial sovereigns have to justify their role on functional grounds. The time is ripe to amend our understanding of the international investment regime bringing it in line with the extant contingencies. Besides costs, benefits and complementarities seen as objective parameters of any deal, the effective implementation of a negotiated deal depends on its interlegality i.e. the impact of legal plurality on legal experiences, perception and consciousness of individuals and groups living in conditions of legal plurality.
In order to support the propositions of the present study we review the evolution of global governance from Westphalia until present time, analyse certain relevant jurisprudence from the EU and the ICSID-tribunals concerning the implementation and compliance with the ECT and identify a series of points of incongruence. We refer to global constitutionalism as a new form of ius commune, a source of overlapping consensus and instrumental methods of legal interpretation.
The study recognises that unreasonable hegemonic claims can be made by other entities than states, thus replacing the Westphalian state with a deterritorialised form of governance would not secure per se a non-jurispathic result. The occurrence of host states not to be ‘trusted’ was the initial reason for promoting a system of investor protection outside the state control. These days the functionality of the ISDS is subject to reconsideration in both the U.S. and the EU, as a new set of conditions prompts a reassessment of necessity, subsidiarity and procedural devices.
The agonistic approach of the present article favours dialogue as a value in itself and it criticises the jurispathic tendencies that endorse one set of norms – and only one against any competing laws in all circumstances. The negative interlegality of the T-TIP, in particular of its ISDS-clause may find its explanation in the negative externalities of the past trade agreements and the role of state as regulatory authority in specific fields e.g. social security, public health and environmental protection. Even the pursuit of preserving free competition via antitrust regulations, state aid control and legislation on consumer protection constitutes a tool for counteracting the negative externalities produced by previous waves of trade liberalisation.
Prevention of anticompetitive behaviour through ex-ante control is one of the usual procedural forms.
The study shows that ex-ante control presupposes that legally speaking a measure does not exist under EU law until it is approved by the control authority, the European Commission.
Therefore an ex-post examination of the legitimate expectations of an investor under a trade agreement becomes very problematic, since it refers to a measure that lacks legal existence under EU law for the period before its notification. An ex-ante control aims to avoid a situation of irreparable damages suffered by third parties, but when the Member State fails to notify or adopts a measure before the final compatibility decision is issued, a situation of radical opposition comes about.
We identify the isolation of the existing system of investor protection as a source of jurispathic tendencies on both sides. The logic of zero sum game infers a depiction of the Other as an enemy and it cynically regards democracy as an excuse for not honouring IIL obligations.
The necessity of any form of ISDS arises from the incompleteness of the system of protection arranged by states and supra-states, thus it does not exist in a position of otherworldliness and isolated contemplation of the prosaic statist world.
From a statist perspective four types of response can be adopted in relation to deterritorialised norms: jurispathic rejection, incorporation, delegation or deference, while from the EU perspective, a norm or principle of international public law should be automatically incorporated, unless it calls into question the constitutional structure and values on which the EU is founded. Deference understood as self-restraint of interpretative autonomy in relation to ambiguous non-harmonised provisions of law could sometimes be the preferred solution, provided that the endorsed alternative reading is reasonable, non-discriminatory and compatible with fundamental rights and general principles of law. The study distinguishes between alter- and outer-legality of a competing norm giving the examples of Omega and Laval rulings adopted by the CJEU.
Delegation is used as characteristic method when states include an ISDS-clause in international agreements, thus entrusting the task of resolving investor-state disputes to arbitral tribunals. The non-state specialised control of the harmful character of state measures under an investment treaty was considered necessary as an exceptional type of recourse allowing access to justice in cases, where the judicial system of a host state could not be ‘trusted’.
The opposition against the necessity of including an ISDS-clause in the T-TIP can be explained also by referring to this implicit use of free trade agreements in the former century, when the investment flows were mainly directed towards the ‘rest of the world’. The repeal of an implicit pact can never be regarded as a random event, but it comes as a result of a reassessment of positions in an interconnected global economy. The legal thinking in international trade and investment must nevertheless rise itself to the challenge of the economic contingencies in the 21st century and the T-TIP negotiations may provide the pertinent impetus for a paradigm change.