From Shield to Sword : TTIP's Lessons on Democratic Legitimacy for International Investment Arbitration

The Transatlantic Trade and Investment Partnership (TTIP), once hailed as a visionary free-trade project, threatens to disintegrate over massive failures of public diplomacy and a sudden surge of popular resistance against private investment arbitration, at least in the form of Investor-State Dispute Settlement. Once highly regarded as an invaluable tool to protect foreign direct investment from takings and other discriminatory ambitions of Third World governments, a string of highly publicized international cases of investment treaty shopping, such as Vattenfall AB v. Germany and Philip Morris International v. Australia, have raised public sensibility to the fact that democratically elected governments may not be able to afford health, food, energy or environmental legislation if they must anticipate arbitral awards compensating foreign investors for sometimes hypothetical economic losses in the form of opportunity costs and forgone profits. If TTIP will require ratification by 28 European parliaments, it is safe to assume that its current form will be dead on arrival, despite intense lobbying efforts and belated campaign for public support undertaken by EU Commissioners and negotiators. There is also concern that such protection of the status quo will cripple entrepreneurship: Silicon Valley and Old Money never mixed well, as the very nature of innovation renders established technology and its installed base woefully obsolete. The public interest and the status quo part ways at every turn: this is the nature of entrepreneurial risk in a free market, while the incestuous nature of the arbitration bar has not contributed to public confidence in its impartiality