Why bother about TTIP?
James Bruges considers: What is it? And why should Quakers be concerned?
The Transatlantic Trade and Investment Partnership (TTIP) would give corporations an exclusive form of justice, enabling them to sue governments should their profits be threatened. It could:
• reduce social, environment and food-safety regulation;
• open up public services such as the NHS for privatisation;
• prevent government from returning them to the public sector;
• eliminate preferential treatment for local suppliers;
• weaken workers’ rights; and
• curtail the regulation of banks.
The Quaker Council for European Affairs (QCEA) has strongly condemned the TTIP.
The European Commission says:
[TTIP] is a trade agreement that is presently being negotiated between the European Union and the United States. It aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.
On top of cutting tariffs across all sectors, the EU and the US want to tackle barriers behind the customs border – such as differences in technical regulations, standards and approval procedures. These often cost unnecessary time and money for companies who want to sell their products on both markets. For example, when a car is approved as safe in the EU, it has to undergo a new approval procedure in the US even though the safety standards are similar. The TTIP negotiations will also look at opening both markets for services, investment, and public procurement. They could also shape global rules on trade.
The harmonisation of regulations causes concern. It seems likely, for example, that the more rigorous safety standards in Europe would be reduced in order to harmonise with lower standards in the USA. This could, among other things, open the floodgates to growth hormones in meat, chicken washed in chlorine and pesticides harmful to bees.
The TTIP deals with social and environmental regulations from the point of view of business alone without taking into account the effect on society or nature. Corporations could determine aspects of government policy.
Tribunals
Extrajudicial tribunals comprised of three private attorneys would judge disputes using the ISDS (Investor-State Dispute Settlement) formula to impose fines, with no right of appeal.
QCEA says it ‘rejects the inclusion of ISDS as part of the TTIP… We consider that the existing national judicial structures in both the US and the EU provide adequate, unbiased and democratically sound legal systems’. ISDS, obviously, appeals to corporations and their shareholders but it is less clear why any government should support it since it would reduce their freedom to legislate in the public’s interest.
ISDS has been used in other bilateral trade agreements. For example, Egypt has been sued for increasing the minimum wage; Slovakia for attempting to bring health insurance back into the public sector; Canada for refusing fracking rights in Quebec; Germany for deciding to phase out nuclear energy; Australia and Uruguay for introducing plain-pack cigarettes; El Salvador for protecting its water from contamination by gold mines; and Vermont for requiring GM foods to be labelled.
Effects
QCEA refers to the ‘chill effect’: ‘governments could potentially change policy to suit the preferences of big business rather than risk losing large sums of tax-payers’ money, even if the claim is potentially frivolous.’ For example, New Zealand has decided not to go ahead with plain-pack cigarettes due to Australia’s experience.
The threat of huge compensation claims could make it impossible for any future British government to stop the further privatisation of the NHS.
And finance? An open letter to negotiators, signed by fifty-two civil society groups in October 2014, is very clear that ISDS would ‘empower the world’s largest banks to launch investor-state claims against US and EU financial regulations, which could chill regulators’ resolve to enact the bold financial stability measures needed to prevent another crisis’.
Our government claims that the TTIP would enhance growth. QCEA says:
The stated purpose of the proposed Free Trade Agreement is to increase incomes for citizens in both the EU and the US… In this situation, the profits will most likely go to those who are already wealthy, the investors… giving large multinational corporations an advantage over Small and Medium Enterprises (SMEs)… The potential cost to governments is enormous.
An urgent situation
During recent decades, the pattern of growth has led to stagnant wages and spiralling inequality.
There is some light on the horizon. Germany and Austria have said that they will not support the TTIP unless the ISDS mechanism is removed. Also, in response to widespread protests, the European commissioner stated:
My Commission will not accept that the jurisdiction of courts in the EU member states be limited by special regimes for investor-to-state disputes. The rule of law and the principle of equality before the law must also apply in this context.
However, many governments, headed by the UK, are challenging him.
Even without ISDS being included, the remaining provisions of this trade deal could greatly damage public services, the environment and health and safety. The full proposals were due to be published at the end of 2014, though implementation is scheduled for 2015. The situation is urgent. If you also feel strongly please write to your MP.
For further information visit: http://bit.ly/QCEAandTTIP
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