WASHINGTON (Reuters) - The United States is keen to include investor protection in a trade pact being negotiated with the European Union and will work with EU officials to find the right balance, a senior U.S. trade official said on Tuesday.
Europe's expected new trade chief said on Monday she did not rule out removing contentious investment protection provisions from the U.S.-EU trade deal, the world's largest free trade pact, which would be a blow to U.S. business groups.
Deputy U.S. Trade Representative Michael Punke said investor state dispute settlement was a "very important goal" for the United States in negotiating the Transatlantic Trade and Investment Partnership (TTIP), and he was confident of finding a solution.
"We believe that there is an appropriate way of balancing the benefits and providing investment protection while at the same time ensuring that we maintain ... the ability to regulate in the interests of our consumers," he said at the Global Services Summit in Washington, in response to a question.
The provision allows companies to bring claims against a country to an arbitration court, which European consumer advocates and unions fear will give too much power to U.S.-based multinational firms.
Sweden's Cecilia Malmstrom, set to take over as the EU's trade chief on Nov. 1 as part of a new EU management team, told EU lawmakers U.S. companies would not be able to use the provision to challenge Europe's safety and environmental laws.
Supporters say including investor protection in the TTIP will act as a blueprint for future trade agreements with other countries, such as China. But sceptics say it is not needed since both Europe and the United States have well developed legal systems.
Punke said he was hopeful of a "fresh start" on TTIP, which is in its seventh round of negotiations this week, once the new EU leadership team was in place.
(Reporting by Krista Hughes; Editing by Chizu Nomiyama)