India rejects attempts of EU, Canada for global investment agreement
Posted on:24 Jan 2017 18:03:45
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24 January 2017 Current Affairs: India, along with Brazil, Argentina and some other nations rejected an informal attempt of European Union (EU) and Canada to work towards a global investment agreement at World Trade Organisation (WTO)-level.
The EU and Canada proposed agreement incorporates a contentious Investor-State Dispute Settlement (ISDS) mechanism. They wanted their investment pact to be the template for a similar multilateral agreement.
The ISDS mechanism permits companies to drag governments to international arbitration without exhausting the local remedies. It also allows them to claim huge amounts as compensation citing losses they suffered due to reasons, including policy changes.
The contentious ISDS mechanism already has been incorporated by investment pact by the EU and Canada.
India has rejected such mechanism. It clearly held that only after all local options have been exhausted for settling disputes between a corporate and a government, then the issues can be taken up in international arbitration tribunals.
It also held that such provisions could be a part of bilateral agreements but they can’t be allowed in a multilateral agreement.
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