THE EU’S proposed new trade commissioner Cecelia Malmstroem was forced to backtrack today after appearing to reject a key plank of the secretive Transatlantic Trade and Investment Partnership (TTIP) deal.

Ahead of routine questioning by the European Parliament international trade committee on her candidacy, Ms Malmstroem released a statement denying that the trade deal with the United States would include the Investor-State Dispute Settlement (ISDS) — a clause allowing private companies to sue governments over legislation that harms their profits.

Trade unions across Europe campaigning against TTIP point out that the clause would permanently enshrine privatisation — because any attempt by an elected government to return services to public ownership could be legally challenged in shady international courts.

International opposition to the deal is growing over fears that it will lower environmental and safety standards in the EU to allow less regulated US companies access to European markets.

Ms Malmstroem’s statement quoted the European Commission’s next president Jean-Claude Juncker as saying: “No limitation of the jurisdiction of courts in the EU member states will be accepted … this clearly means that no investor-state dispute settlement mechanism will be part of that agreement.”

It added: “I fully support this approach of the president-elect and will work in this sense in the negotiations.”

The Socialist group in the European Parliament eagerly seized on the remarks, praising the “significant shift in EU trade policy” it represented.

“This is extremely welcome news and a major victory for Socialists and Democrats group which has led Europe-wide calls for this mechanism to be scrapped,” Socialist group trade spokesman David Martin said.

But an embarrassed Commission immediately clarified that Mr Juncker had said nothing of the sort and Ms Malmstroem’s final testimony would not include his alleged remarks.

The beleaguered would-be commissioner told MEPs ISDS was a “very legitimate” way for corporations to protect their “investments.”

MEPs cannot veto Ms Malmstroem’s appointment, since the unelected Commission president gets to pick his own slate of commissioners, but the European Parliament can reject his whole slate and ask him to start again.

This has never happened, although current president Jose Manuel Barroso was forced to drop some names in 2004 after a veto threat was issued.