UK could be better off leaving the EU if TTIP passes says Joseph Stiglitz

Hazel Sheffield in The Independent

Joseph Stiglitz, a Nobel-prize winning economist, has said that the UK could be better off leaving the European Union if the Transatlantic Trade and Investment Partnership passes.

“I think that the strictures imposed by TTIP would be sufficiently adverse to the functioning of government that it would make me think over again about whether membership of the EU was a good idea,” Stiglitz said.

TTIP gives corporations the power to sue governments when they pass regulation that could hit that corporation's profits.

READ MORE

• TTIP talks 'could be completed before the end of 2016'
• TTIP 'must include human rights', Corbyn tells Cameron
• NHS could be part-privatised if UK and EU agree TTIP trade deal'
• TTIP rules make fighting tax avoidance harder

United Nations figures have shown that that US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements.

Details of the cases are often secret, but notorious precedents include the tobacco giant Philip Morris suing Australia and Uruguay for putting health warnings on cigarette packets.

“Every time you passed a regulation against asbestos or anything else, you would be sued,” Stiglitz said. 

“There’s nothing in TTIP to stop you writing the regulation. You can write the regulation. You would just have to keep writing a cheque to Philip Morris to make up for the profits that they would have had if they were able to kill people like they were able to in the past,” he said.

The planned TTIP agreement between the EU and the US would create the world’s largest free-trade zone, sweeping aside tariffs and other barriers to the trade of goods and services. Proponents say it would encourage investment and create jobs.

But the controversial provision for an investor-state dispute settlement would allow multinationals to sue foreign governments if it thought regulations were hurting profits.

Stiglitz described TTIP as “a massive rewriting of the rules with no public discussion”.

“The dangers to our society are very significant,” he said.

The lies behind this transatlantic trade deal

Plans to create an EU-US single market will allow corporations to sue governments using secretive panels, bypassing courts and parliaments

• 
• • George Monbiot
  • The Guardian, Monday 2 December 2013 20.31 GMT

A nuclear power plant in Biblis, south-west Germany. The investor-state dispute settlement is aready 'being used by a nuclear company contesting Germany's decision to switch off atomic power'. Photograph: Kai Pfaffenbach/Reuters

Panic spreads through the European commission like ferrets in a rabbit warren. Its plans to create a single market incorporating Europe and the United States, progressing so nicely when hardly anyone knew, have been blown wide open. All over Europe people are asking why this is happening; why we were not consulted; for whom it is being done.

They have good reason to ask. The commission insists that its Transatlantic Trade and Investment Partnership should include a toxic mechanism called investor-state dispute settlement. Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments.

This mechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world. Already it is being used by mining companies to sue governments trying to keep them out of protected areas; by banks fighting financial regulation; by a nuclear company contesting Germany's decision to switch off atomic power. After a big political fight we've now been promised plain packaging for cigarettes. But it could be nixed by an offshore arbitration panel. The tobacco company Philip Morris is currently suing Australia through the same mechanism in another treaty.

No longer able to keep this process quiet, the European commission has instead devised a strategy for lying to us. A few days ago an internal document was leaked. This reveals that a "dedicated communications operation" is being "co-ordinated across the commission". It involves, to use the commission's chilling phrase, the "management of stakeholders, social media and transparency". Managing transparency should be adopted as its motto.

The message is that the trade deal is about "delivering growth and jobs" and will not "undermine regulation and existing levels of protection in areas like health, safety and the environment". Just one problem: it's not true.

From the outset, the transatlantic partnership has been driven by corporations and their lobby groups, who boast of being able to "co-write" it. Persistent digging by the Corporate Europe Observatory reveals that the commission has held eight meetings on the issue with civil society groups, and 119 with corporations and their lobbyists. Unlike the civil society meetings, these have taken place behind closed doors and have not been disclosed online.

Though the commission now tells the public that it will protect "the state's right to regulate", this isn't the message the corporations have been hearing. In an interview last week, Stuart Eizenstat, co-chair of the Transatlantic Business Council – instrumental in driving the process – was asked if companies whose products had been banned by regulators would be able to sue. Yes. "If a suit like that was brought and was successful,it would mean that the country banning the product would have to pay compensation to the industry involved or let the product in." Would that apply to the European ban on chicken carcasses washed with chlorine, a controversial practice permitted in the US? "That's one example where it might."

What the commission and its member governments fail to explain is why we need offshore arbitration at all. It insists that domestic courts "might be biased or lack independence", but which courts is it talking about? It won't say. Last month, while trying to defend the treaty, the British minister Kenneth Clarke said something revealing: "Investor protection is a standard part of free-trade agreements – it was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least." So what is it doing in an EU-US deal? Why are we using measures designed to protect corporate interests in failed states in countries with a functioning judicial system? Perhaps it's because functioning courts are less useful to corporations than opaque and unjust arbitration by corporate lawyers.

As for the commission's claim that the trade deal will produce growth and jobs, this is also likely to be false. Barack Obama promised that the US-Korea Free Trade Agreement would increase US exports by $10bn. They immediately fell by $3.5bn. The 70,000 jobs it would deliver? Er, 40,000 were lost. Bill Clinton promised that the North American Free Trade Agreement would create 200,000 new jobs for the US; 680,000 went down the pan. As the commentator Glyn Moody says: "The benefits are slight and illusory, while the risks are very real."

So where are our elected representatives? Fast asleep. Labour MEPs, now frantically trying to keep investor-state dispute mechanisms out of the agreement, are the exception; the rest are in Neverland. The Lib Dem MEP Graham Watson wrote in his newsletter, before dismissing the idea: "I am told that columnists on the Guardian and the Independent claim it will hugely advantage US multinational companies to the detriment of Europe." We said no such thing, as he would know had he read the articles, rather than idiotically relying on hearsay. The treaty is likely to advantage the corporations of both the US and the EU, while disadvantaging their people. It presents a danger to democracy and public protection throughout the trading area.

Caroline Lucas, one of the few MPs interested in the sovereignty of parliament, has published an early-day motion on the issue. It has so far been signed by seven MPs. For the government, Clarke argues that to ignore the potential economic gains "in favour of blowing up a controversy around one small part of the negotiations, known as investor protection, seems to me positively Scrooge-like".

Quite right too. Overriding our laws, stripping away our rights, making parliament redundant: these are trivial and irrelevant beside the issue of how much money could be made. Don't worry your little heads about it.

Pharmaceutical companies putting health of world's poor at risk

India makes cheap medicines for poor people around the world. The EU, pharmaceutical firms and now the US are pressuring the 'pharmacy of the developing world' to change tack

Customers buy medicine at a pharmacy in Mumbai. Photograph: Kuni Takahashi/Getty Images

India is often called the pharmacy of the developing world, which is no great surprise as more than 50% of its $10bn annual generic medicine production is exported.

But the domestic drug industry behind India's role as global pharmacist stands to emerge rather poorly from the free trade agreement (FTA) that Europe is proposing for India. In late-stage negotiations over the terms of the long-awaited agreement, the EU is calling for intellectual property rights enforcement that goes well beyond India's obligations as a member of the World Trade Organisation and would make it all but impossible for generic drug manufacturers in the country to continue in their present structure.

This could delay the introduction of cheaper medicines in India and elsewhere at a time when the global financial crisis has already put the squeeze on life-saving medicines across the world (last year the Global Fund to Fight Aids, Tuberculosis and Malaria cancelled its 11th funding round due to the crisis).

Yet protests on the streets of Delhi against the unfair terms of the EU-India FTA have been little noticed in the west, where such agreements are increasingly being promoted as a route out of domestic crises. For European leaders, they represent a foreign policy counterpart to calls for a growth pact at home. In a recent editorial, however, the former EU high representative for foreign and security policy, Javier Solana, all but admits that a similar agreement that Europe is tying up with Peru and Colombia may be "denying their weaker citizens [human] rights in favour of the interests of business".

In India, such fears are perilously close to being realised, because the EU-India FTA negotiations are not the only way in which the health of Indian citizens is coming under attack from Europe. In an effort to boost falling profit margins in the west, and to prise open more profitable markets elsewhere, European pharmaceutical companies are also chipping away at India's judicial system.

Next month, the supreme court of India will hear final arguments in a long-running case between Swiss pharmaceutical giant Novartis and the Indian government. Novartis is seeking extended intellectual property protection for a marginally modified anti-cancer drug, Glivec, for which the original patent has run out. This is a practice known asevergreening, seen by many as an unfair way for pharmaceutical companies to maintain artificially high drug prices in developing markets. That is certainly the view of the Indian government, which, in 2005, inserted a clause into its intellectual property law deliberately intended to prevent the practice.

That clause has proven to be a literal lifesaver many times since, and it ensured thatNovartis's original case was thrown out of court in 2006. But Novartis has filed new litigation in an attempt to breach India's legal defences. The final ruling is next month and there is every chance Novartis may succeed. If it does, other pharmaceutical companies will be able to impose higher prices on drugs in India too.

The Novartis case coincides with a third major assault on India's pharmaceutical industry: the final spear in a triple-pronged attack on its generic drug manufacturers by the west.

This involves the attempt by German pharmaceutical company Bayer to revoke the recent granting of a compulsory licence for an Indian firm, Natco Pharma. The licence was to produce a cheaper version of its anti-cancer drug Sorafenib. Bayer does not manufacture the drug in India, and imports in such small volumes that only a tiny fraction of potential patients could benefit. For its brand, Sorafenib, Bayer has charged Indian patients about $69,000 for a year of treatment, an unaffordable amount for most Indian households. Under the licence, Natco will sell the same medicine at 3% of this price, while paying a licence fee – and still make a profit.

But now Barack Obama's administration has weighed in on behalf of Bayer's battle for continued monopoly pricing. Testifying before the House of Representatives subcommittee on intellectual property on 27 June, the deputy director of the US Patent and Trademark Office said US officials are "constantly being there on the ground" pressuring the Indian government to desist from compulsory licensing.

It is not only Indian patients who stand to suffer from this triple-pronged attack. So, too, will charities such as Médecins Sans Frontières, which relies on Indian generic producers to supply 80% of the antiretrovirals it uses around the world. As MSF spokeswoman Leena Menghaney puts it, India is "literally the lifeline of patients in the developing world". In 2006, MSF launched an international campaign against Novartis, signed by half a million people, including Archbishop Desmond Tutu and the author John le Carré, to get Novartis to drop their pursuit of what the campaign argues is exploitation.

The campaign may not have reckoned on the scale of the assault under way, however. It is not only the pharmaceutical industry that needs to be addressed but the continued and ruthless lobbying by western politicians to secure the profitability of their own industries.

We ought to be asking why governments in the rich world still seem happy to checkmate the lives of poor people to save their political skins. And why the pharmaceutical industry sees India as such a threat. Could it be that they detect the whiff of real competition?

• Hans Lofgren is associate professor in politics at Deakin University, Melbourne. He is the editor of two forthcoming volumes (Palgrave Macmillan and Social Science Press) on pharmaceutical policy and access to medicines in India and the global south

EU closer to India trade deal

By Bari Bates in Asia Times Online

BRUSSELS - Behind closed doors, a trade deal affecting a fifth of the world's population has been quietly in the works for years. But while details of the free trade agreement (FTA) between the European Union and India remain ambiguous to the general public, concerns continue to mount over the effects such a deal could have on an unsuspecting third party: the affordable drug market of the developing world.

Negotiations have been underway for five years, with details on issues such as India's generic drug market sending delegates from both the EU and India through multiple rounds of deliberations in the hopes of settling on an FTA that would be "mutually beneficial and sustainable", especially given Europe's current economic climate.

Finally, the five-year ordeal seems to be moving toward a conclusion, according to the European External Action service. The latest EU-India summit took place on February 10 and was hailed by Jose Manuel Durao Barroso, president of the European Commission, as a "significant step forward".

The European Union is already India's primary trade partner and largest source of foreign direct investment (FDI), according to Barroso.

EU-India trade doubled to more than 67.9 billion euros (US$89.5 billion) in 2010 from 28.6 billion euros in 2003, while EU investment has tripled to three billion euros since 2003.

Barroso says the final agreement will be reached this autumn and, if passed, would signal the implementation of the world's largest trade agreement in the world, opening the doors for research and innovation, job creation, and countless business opportunities.

But some experts and activists are fiercely opposed to the deal, which they say will stunt the availability of affordable medicine in the developing world.

'Hands off our medicine'
These concerns aren't new; the issue has been on the radars of several organizations for years, with growing concerns over how the trade agreement is being reached and what it means for organizations who work to supply low-cost medicines to those in need.

As the FTA has evolved, certain measures such as data exclusivity have been taken off the table, though other potentially harmful provisions remain.

Initial opposition to the trade deal centered on issues of intellectual property rights and market access for large European businesses, with the not-for-profit group Corporate Europe Observatory (CEO) at the helm with a petition to halt the trade agreement altogether. The petition had the signatures of over 100 organizations as of December 2010, just prior to the 11th EU-India summit.

One of CEO's biggest concerns is that new trade rules could stall the distribution of generic drugs, thus keeping patented medicine prices high and increasing the overall cost of healthcare for households. According to Oxfam International, generic competition lowers medicine prices by 90-99%.

Most significantly, generic competition in India has lowered prices for first line antiretroviral drugs to US$100 per year for a single patient, down from $10,000 just 10 years ago for the same treatment.

Doctors Without Borders (known in French as Medecins Sans Frontieres, or MSF), an independent international medical humanitarian organization that delivers emergency aid, has also been steering opposition to the FTA's impact on generic drugs.

The organizations's campaign called for Europe to keep its "hands off our medicine" and issued a statement outlining risks associated with the widening net of enforcement provisions, which have serious implications for the availability of medicines.

If certain enforcement provisions related to intellectual property are included in the FTA, they could give large pharmaceutical companies the right to sue not only generic drug manufacturers but also generic drug suppliers and customers, MSF said.

Such measures could deter treatment providers from buying or supplying generic drugs, leaving the far more expensive brand drugs as the only option for people in desperate need.

The organization rallied in New Delhi on February 10 along with HIV-positive community members to call attention to the remaining provisions in the FTA that put the generic drug market in serious jeopardy.

Nearly 2,000 people strong, the protests included remarks from MSF president Unni Karunakara, who said, "We have watched too many people die in places where we work because the medicines they need are too expensive. We cannot allow this trade deal to shut down the pharmacy of the developing world."

Given that Europe posits itself as a world leader in development aid, the potential hypocrisy of the situation isn't lost: if these provisions are, in fact, included in the FTA, the EU stands to undermine its own large-scale aid efforts by limiting access to life-saving medications.

Besides the petition, CEO also launched legal action against the European Commission early last year, claiming that corporate lobby groups were given privileged access to information on the EU-India trade talks.

The organization alleged that 17 documents were released to industrial players but withheld from CEO because it would "undermine the EU's international relations".

CEO requested the documents in order to monitor the trade deal, which the organization believes leans much heavily towards the interests of large corporations at the expense of trade unions, non-governmental organizations and small enterprises.

CEO's Pia Eberhardt said that she expects a hearing within the first half of this year, though no formal date has been set. From that point, it will take roughly six additional months to reach a conclusion. But while the case circles the justice system, the FTA could slip through the cracks.