EU proposes special dispute court for US trade deal: Official

Brussels: The European Union on Wednesday proposed a special court to resolve any disputes arising from a planned huge trade deal with the United States, instead of the widely criticised private tribunals that Washington wants.

EU Trade Commissioner Cecilia Malmstroem said there was huge public scepticism about the previous dispute resolution plans, the most controversial element of the massive TTIP (Transatlantic Trade and Investment Partnership) deal with the United States.

"There is a fundamental lack of public trust in the old model," Sweden`s Malmstroem told a press conference in Brussels. 

"What we are we are proposing for the TTIP is a court-like system."

Talks on the pact between the US and 28-nation EU -- which would be the world`s biggest trade deal if completed -- began in 2013 and the two sides aim to conclude them by 2016.

But they have been dogged by disagreements, particularly over Washington`s insistence that as part of the pact, private companies be allowed to sue governments before special tribunals.

The system -- known as ISDS, or the investor-state dispute settlement -- forms part of other trade deals and is supposed to protect investors who feel that local laws such as health and safety regulations violate the trade deal and threaten their investments.

But campaigners say that would allow commercial interests to force governments to change state regulation, undercutting democratic oversight.

The EU carried out a major survey last year which found widespread public scepticism about the pact, and ISDS in particular.

Malmstroem said the dispute court mechanism would use judges, not professional arbitrators, who would be publicly appointed by the EU and US, and also proposed setting up an appeal court.