Ref. Ares(2017)4720309 - 27/09/2017
Ref. Ares(2018)6087220 - 28/11/2018
Global investment creates jobs
Speech by Cecilia Malmström
European Commissioner for Trade
Event on a multilateral investment court
South Korea, 21 September 2017
Ladies and gentlemen,
Today is an important day for us: our trade agreement with Canada comes
into provisional effect today.
As I speak, the first shipments of goods benefiting from these tariffs are
crossing the Atlantic. Just the first of an estimated 500 million euros in tariff
savings EU exporters can gain.
In this, as in other areas of our trade policy: trade works for our values. It
supports our standards.
It is a modern and progressive agreement.
Alongside cutting virtually all tariffs, and opening new markets…
… it protects and promotes labour rights, and the environment….
… it safeguards governments' right to regulate in the public interest.
It shows trade does not mean submitting to globalisation, but shaping it.
These considerations apply to investment too, not just trade.
Investment is an incredible job-creator.
Like trade policy as a whole, investment protection should not be in conflict
with our values, but based on them.
The EU is the world's biggest recipient and the world's biggest donor of
foreign direct investment.
In 2015, the EU held stocks abroad worth almost 7 billion euros; equivalent
to half our GDP.
Here in South Korea, 90,000 people are working for EU-owned affiliates.
In India, nearly one million. In China, it is 1.6 million workers.
That investment creates not just roads and cars and factories, it creates jobs
and livelihoods and opportunities.
In Europe we realise the importance of boosting investment. I know many
other countries do too.
But that doesn't not mean everything should stay as it is.
In particular, people have expressed many concerns with investor-state
dispute resolution, ISDS.
And in some respects those concerns are valid.
Like the way private interests interact with the right of governments to set
their own policy.
ISDS doesn't get the balance right.
Particularly because proceedings may be held in private, with the risk of
conflicts of interest.
This debate over the balance of the public interest has been raised vocally in
But I believe it is also a concern shared across the world.
In countries like India, for example, which recently abandoned many of its
existing investment agreements amid concern over their public policy
And we saw much interest, on both sides, in the recent WTO case on
cigarette packets in Australia. [pm update in case the judgment is out]
People worry that these tribunals might undermine health standards, or food
Might prevent governments from acting on behalf of their citizens.
We shouldn't stick our heads in the stand on this issue.
We should show the system can modernise and reform: to get the balance
A good modern system would give investors the confidence they need…
… while also addressing these causes for concern.
We could safeguard the public interest in a world of globalised value chains.
We could offer people and companies protections, without protectionism.
This is what we have put forward with our reforms to investor state dispute
The investment court systems we have introduced bilaterally with Canada
and Vietnam deal with a number of these concerns.
It shows there is a workable model to safeguard the public interest in a
Dealing with issues like transparency, ethics and professionalism.
Offering investors the protections they need.
While ensuring governments can in turn offer protections to their people: for
food safety, public health and so on.
That's protections, without protectionism.
That is a step forward, but still not the ultimate answer.
The over 3000 investment agreements in force to day would still contain
ISDS – with all its drawbacks.
And it means there are multiple – possibly inconsistent – systems operating
So I'd like to look at how we reform this existing system of ISDS. But I'd to
look at a multilateral reform, together with our global partners.
First, because we believe in the multilateral system, the structure that
underpins the world's prosperity.
We best defend that system by showing it remains relevant and adaptable.
Second, because each country going its own way adds to the spaghetti bowl
of different solutions and systems. Causing confusion and uncertainty.
We know the principles this reform could follow: a more permanent,
multilateral system following the principles of other international courts and
dispute settlement systems.
We all have our own ideas about what such a multilateral reform could like.
But none of us should be rigid. We certainly won't be. On the EU side, we
are looking forward to working with international partners. Finding a
compromise is better than each party going their own way.
We put forward the idea to trade ministers in Davos earlier this year.
We have consulted on the idea within Europe.
And now I'm delighted that UNCITRAL, the UN Commission on
International Trade Law, have taken on this workstream. This is the right
place to discuss it.
Under the UN umbrella, any government can take part; any stakeholder can
observe and give their views.
In particular, ASEM members have a perspective to offer and a contribution
to give to this. And I hope you will be doing so.
In the world today we find growing concerns about the impacts of
globalisation, trade and investment.
Those of us who believe in the benefits of openness should deal with this.
Not by keeping everything as it is. But by showing we can reform.
We face common challenges and common questions; we have many of the
We will work best if we work together.
This is what we have the chance to do by working together for an investment
court at global level. Thank you.