By Barbara Lewis
STRASBOURG (Reuters) - European lawmakers on Wednesday backed a compromise plan designed to spur negotiations on a trade pact between the European Union and the United States and overcome deep divisions within the European Parliament.
Opposition to the proposed trade pact between the EU and the United States, which would be the world's biggest, has focused on its provision for private arbitration. European opponents say this would allow U.S. multinationals to challenge European food and environmental laws on the grounds they restrict commerce.
The U.S. is making it a condition of their trade negotiations that there is a dispute body.
While the main centre-right political group in the European Parliament considers a U.S. trade deal would be pro-business, the Greens as well as some far-left and far-right see it as a threat to EU sovereignty and EU laws.
Wednesday's vote gained majority support after Martin Schulz, a German socialist who heads the 751-seat European Parliament, put forward a compromise on setting up a new European court to settle any disputes.
"What citizens refuse (reject) is that as a result of a trade agreement, legally and democratically adopted laws and binding standards could be undermined by arbitration," Schulz said in Strasbourg in a news conference ahead of the vote.
To counter that, he said his plan provided for a transparent body that would not threaten EU laws. It would resolve quarrels between investors and governments by using publicly appointed, independent professional judges in public hearings.
The parliament has the power to reject any final deal on the Transatlantic Trade and Investment Partnership (TTIP), which would encompass a third of world trade.
The difficulty in getting as far as Wednesday's vote underscores the depth of resistance in some quarters.
Wednesday's voting was interrupted by arguments over procedure by politicians with "No to TTIP" banners.
In a statement, the Green group in the European Parliament said the compromise version still allowed foreign investors to use a separate layer of jurisdiction, other than the domestic legal system.
"The Greens call on citizens, trade unions, non-governmental organizations, towns and regions and businesses to speak out and contact their elected representatives and hold them to account on this attempt to privatize justice and infringe democratic rights," Green Member of the European Parliament Yannick Jadot said.
(Editing by Ruth Pitchford)