Euro MPs demand public dispute system for US trade deal

European Union lawmakers demanded Wednesday that a proposed free trade deal with the United States drop a US-backed private dispute settlement system in favour of public procedures in open court.

The European Parliament has held up the progress of negotiations on the Transatlantic Trade and Investment Partnership (TTIP) over Washington's insistence that private companies be allowed to sue governments before special tribunals.

Many members of European Parliament (MEPs) believe that the Investor-State Dispute Settlement (ISDS) system -- a feature in other US trade deals -- would allow commercial interests to force governments to change policy, undercutting democratic oversight.

Lawmakers on Wednesday approved a recommendation to negotiators, fearful they could give too much away to their US counterparts in pursuit of what would be the world's largest free trade deal.

"A new justice system, run by publicly-appointed judges and subject to scrutiny and transparency rules, should replace private arbitration under ISDS," said the recommendation, one of a series voted on by the parliament.

Socialist MEP Bernard Lange, who led talks on the text, said in the statement: "We insist that the right of lawmakers on both sides of the Atlantic to legislate must not be undermined by private arbitration courts or other bodies."

He added: "If, at the end of the day the agreement is bad, we will reject it. If it is good, we will vote for it."

EU Trade Commissioner Cecilia Malmstroem earlier this year proposed setting up an international investment arbitration court to allay concerns in the 28-nation bloc over ISDS.

The European Parliament also said the EU should aim for a "balanced" deal which increases market access for EU goods, removes US restrictions on foreign ownership of transport services and airlines, improves access to US telecommunications markets and opens up the US public procurement market at all levels.

EU protections for consumer data as well as health and safety should meanwhile be protected, they said.

Negotiators aim to reach a deal by the end of the year. The 10th round of TTIP talks, since they began in 2013, are due to open Monday in Brussels.

Talks began optimistically but widespread unease in Europe over ISDS and other issues has slowed progress.

The European Parliament must approve any final accord.