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Sweden's Cecilia Malmstroem told the European Parliament that members' concerns over the controversial Transatlantic Trade and Investment Partnership (TTIP) had been taken fully into account.
Malmstroem said the plans she announced this week for steps paving the way for a global investment court were "not cosmetic changes but rather the most significant overhaul of investment arbitration in decades."
"They are a serious response to a widespread, justified scepticism about what has gone before."
Talks on the TTIP have dragged on for two years and been shrouded in controversy, with opponents charging it will give US companies free rein to challenge EU governments, potentially forcing them to change their policies.
At the centre of the row is the so-called Investor-State Dispute Settlement mechanism, an arbitration system which effectively allows companies to bypass national courts if they feel their investments are under threat.
Malmstroem has proposed changes to the mechanism, including making the arbitration tribunals more like traditional courts, with a view to eventually setting up a permanent international investment court.
Malmstroem said the changes to the ISDS would recognise that EU governments have the right to regulate, "putting that in black and white."
"In the past, agreements have been drafted more with the protection of investment in mind than the right of governments to regulate. It will no longer be the case."
Companies would also be barred from seeking redress via both the ISDS and national courts, she added.
Lawmakers gave Malmstroem's plans a mixed response, welcoming the fact she had tried to meet their concerns but with some remaining hostile to a TTIP they believe is not in the best interests of the 28-nation EU.
Greens/European Free Alliance MEP Yannick Jadot of France said US investment in the EU was increasing anyway and the Commissioner "had not shown at the end of the day why we need ISDS."
Sean Kelly of the European People's Party, the largest in Parliament, said the plan "addresses some of the key issues in preserving the right to regulate. We can make progress on this."