For those who may still be unsure of what TTIP is, the Transatlantic Trade and Investment Partnership (TTIP) is the largest trade deal in history. It is being negotiated in secret between the EU and the USA and its main aim is to remove what are perceived to be the last remaining ‘barriers’ to a free trade zone encompassing the EU and the USA. These ‘barriers’ are in fact hard won public policy legislation, environmental protection and employment rights. Under TTIP large corporations will have the right to sue governments if they believe that laws and regulations in either jurisdiction could potentially harm their profits. Corporations will also be given privileged early access to proposed public policy legislation potentially leading to what some have described as a ‘chilling effect’, in other words governments will be reluctant to put forward legislation that large corporations are likely to be hostile to. TTIP’s emphasis on ‘regulatory cooperation’ is designed to reduce the cost to businesses that operate in both the EU and the USA by allowing them to take advantage of large economies of scale, this can only happen if European and American regulations are equivalent. In reality this will mean a race to the bottom for everybody covered by the treaty.
In the September 2015 Global Solidarity Newsletter we provided an update on the progress of TTIP through the European Parliament. Since then there has been little public discussion of TTIP from official channels. In February this year European MP’s were finally allowed to read the text of TTIP. Access was granted for two hours to read 300 pages of text in sealed reading rooms on the provision that the MP signed an agreement that they would not discuss with anybody what was in the document. All European MPs had to read the text in English, regardless of their first language. Careful not to breach the terms of the confidentially agreement German MP Katja Kipping made the following observation.
“I read nothing to alleviate my concern that the US side wishes to make life more difficult for public and community enterprises and to secure better terms for transnational corporations in the battle for public tenders. I also read nothing to calm my fears that EU negotiators are prepared to sacrifice our social and environmental standards for the prospect of winning lucrative contracts for big European firms.”
The contrast between the lack of transparency afforded to members of European legislatures and the early access that would be given to corporations in the name of ‘regulatory cooperation’ could not be starker. Over the last year NIPSA members along with others across Europe have lobbied their MP’s and MEP’s in unprecedented numbers to express their opposition to TTIP. This has led to some minor concessions being offered to soften the impact. I received a reply from Northern Ireland MEP Jim Nicholson in June 2015 in which he addressed concerns that Northern Ireland’s farming industry could be badly affected by cheap US imports produced using inferior environmental standards.
“European standards are vital, and in writing the Agriculture Committee’s opinion on TTIP, I made it very clear that our high standards on food production, consumer protection, animal welfare and the environment must be maintained”
Mr Nicholson is directly involved in the TTIP negotiations and his insistence on maintaining EU standards resonates with the public outcry against TTIP ‘harmonisation’ not just for food production but across all sectors. However, according to War on Want this has led to negotiators proposing that the goal of regulatory convergence could be achieved not through harmonisation of regulations but by a ‘mutual recognition’ of social and environmental regulation. This would mean that American food and products manufactured to a safety standard that would still be illegal in the EU being sold alongside domestic produce as if they had met EU standards. Of course those imports would be far cheaper for the consumer to buy and as such would pose a huge risk not just to our farming industry but to small and medium businesses across Europe. Currently in the UK small businesses account for 60% of all private sector employment, if the markets they operate in are suddenly overwhelmed by cheap imports the effect on employment would be catastrophic. It may not grab the headlines in the same way as the failure to protect the steel industry but the dynamics and the cost will be the same. This is Hobson’s choice, either abandon your safety standards to try to compete with us or maintain them and go out of business. It is worth pointing out that in the week that Port Talbot steelworks was thrown to the wolves, news surfaced that the US has placed a 266% tariff on steel imports in order to protect their steel industry.
The USA does not escape from the race to the bottom that TTIP will cause either. The federal legislation regulating toxic substances in America, the Toxic Substance Control Act (TESA) is notoriously week; since it was passed 38 states have introduced 250 pieces of legislation providing much more stringent protection from hazardous substances. According to the Centre for International Environmental Law TTIP has the potential to overturn all of this legislation (a long held aim of large chemical and manufacturing corporations) as environmental protection would become a federal issue due to harmonisation with the EU.
Ultimately it may be the USA who ensures that TTIP is shelved, at least in its current form. Donald Trump and Bernie Sanders both are publicly hostile to further free trade agreements and even Hillary Clinton, a long time cheerleader for NAFTA has stated that her position on free trade has evolved. What we can expect now is a rush to conclude negotiations before President Obama leaves office in January 2017.
By the time the next edition of this newsletter is published the UK will have voted on whether or not to remain in the EU. It is regrettable but not surprising that David Cameron’s ‘reforms’ of the EU were limited to attempting to impoverish low paid workers who had been encouraged to come to Britain in more prosperous times. True reform of the EU would mean ensuring that decisions that have the potential to hugely impact on the lives of its citizens could not be taken in secret, where MP’s would have unfettered access to information on important issues and where the commission was directly accountable to the people of Europe. The EU Trade Commissioner Cecilia Malmstrom caused shock when asked by War on Want Executive Director John Hilary how she could continue with promoting TTIP in the face of such massive public opposition she replied “I do not take my mandate from the European people.”