David Malone on why TTIP (free trade agreements) are anti-democratic and against the people.
Showing posts with label ISDS. Show all posts
Showing posts with label ISDS. Show all posts
Sunday, 27 March 2016
Sunday, 3 January 2016
What is TTIP? The controversial trade deal proposal explained
Julia Kollewe in The Guardian
The EU claims it will create millions of jobs and bring down the cost of living – but others say it is a threat to public services such as the NHS
As highlighted in this Guardian video, another major concern is whether standards will drop. For example, the EU bans cosmetics tested on animals but the US does not. Another question is what happens if EU countries want some protection, for instance Italy for its Parma ham, and the UK for its pork pies.
One of the most controversial elements of the trade proposal is the Investor State Dispute Settlement (ISDS) provision. ISDS provisions have been included in many trade deals since the 1980s, to encourage overseas investment in poorer countries. It means private investors can ask a tribunal of international arbitratorsto judge if a government has treated them unfairly – and can get compensation.
Over the past decade some big, mainly American companies, such as tobacco conglomerate Philip Morris, have used ISDS to claim rights. The provision would in theory allow private investors to sue governments for the loss of future profits due to decisions made by national parliaments. Critics say it could be used to attack the UK’s NHS by making privatisations of specific services harder to reverse.
-----
Some say the US/EU trade deal that could be agreed this year will open up markets and promote UK growth. Others fear it will drive down wages and promote privatisation
Philip Inman in The Guardian
Cheap American olive oil could, in a few years’ time, be sitting on supermarket shelves next to the Tuscan single estate varieties loved by British foodies. At present a prohibitive tariff on US imports effectively prices them out of contention.
But a groundbreaking trade deal could lower the $1,680-a-tonne tariff on US olive oil to match the $34 a tonne the US charges on imports from the EU. Or the tariffs could disappear altogether. Either way, Greek, Spanish and Italian olive farmers must fear the Transatlantic Trade and Investment Partnership (TTIP), a deal that aims to create a level playing field between them and massive US agri-businesses.
Trade deals were once seen as a panacea for global poverty. In the 1990s, the World Trade Organisation was formed to harmonise cross-border regulations on everything from cars to pharmaceuticals and cut tariffs in order to promote the free flow of goods and services around the world.
There was always a fear that, far from being a winning formula for all, lower tariffs would favour the rich and powerful and crucify small producers, who would struggle to compete in an unprotected environment.
The effects of the North American Free Trade Agreement (Nafta), signed by the US, Mexico and Canada in 1993, appeared to justify that fear: it became in later years a cause celebre for anti-poverty campaigners, angered by the plight of Mexican workers. Not only were they subjected to low wages and poor working conditions by newly relocated US corporations – and, as consumers, to the relentless marketing power of Walmart, Coca Cola and the rest – but the major fringe benefit of cutting corruption remained illusory.
This year the US hopes to sign what many believe will be Nafta’s direct successor – TTIP. Should it get the green light from Congress and the EU commission, the agreement will be a bilateral treaty between Europe and the US, and, just like Nafta before it, outside the ambit of a gridlocked WTO.
Supporters say it will be an improvement on its predecessor because the main proponents are a liberal US president and a European commission that considers itself concerned with workers and consumers. Why, the commission asks, would 28 relatively affluent member states with concerns about high unemployment, stagnant wages, welfare provision and climate change agree to a charter that undermines workers’ rights, attacks public services or reduces environmental regulations?
TTIP is also billed as an agreement between equals that allows both sides to promote trade: it is claimed that the UK’s national income could be raised by £4bn-£10bn annually, or up to £100bn over 10 years. That amounts to a 0.3 percentage point boost to GDP, which would have pushed this year’s expected 2.4% growth to 2.7%.
An anti-TTIP demonstration in Berlin this year. Photograph: Wolfram Steinberg/EPA
But it strikes fear into the hearts of many, who believe it to be a Trojan horse for rapacious corporations. These corporations, hellbent on driving down costs to enhance shareholder value, spell the end for Europe’s cosy welfare states and their ability to shield fledgling or, in the case of steel and coal, declining industries from the harsh realities of open competition.
TTIP has been compared to the 1846 Corn Law abolition, which either swept away protectionist tariffs that impoverished millions of workers, or protected a vital source of food and led Karl Marx to ask: “What is free trade under the present condition of society?” His answer was: “It is the freedom which capital has to crush the worker.” Is that the case with TTIP? Here are five key factors to consider.
Health and public services
From the moment TTIP became part of President Barack Obama’s growth strategy, critics have feared that he little realised the expansionary intentions of US healthcare companies or was too distracted to care. The concern relates to the prospect of EU countries, under pressure from rising healthcare costs, handing over major parts of healthcare provision to the private sector. Once services are in private hands, say critics, TTIP rules will prevent them being taken back into state control.
Since these fears were voiced, trade negotiators have excluded provisions that would have allowed firms to sue governments for the loss of health and public services contracts once they expired. This allows the UK’s rail franchise system and the contracting-out of health services to continue under time-limited contracts.
But the US private health industry, which is the largest in the world, views a Europe struggling with the needs of an ageing baby-boomer generation as ripe for the picking. For this reason alone, contracting out the distribution of drugs, the supply of medical devices and the provision of vital services could prove irresistible.
Dispute resolution
A little known facet of every trade deal is a separate form of arbitration for the businesses covered by the agreement, allowing them to avoid the civil courts. As such, the investor-state dispute resolution (ISDS) gives foreign investors the power to sue a government for introducing legislation that harms their investment.
Famously, it was used by big tobacco to sue the Australian government when it introduced plain cigarette packaging. Before and after the scandal, other governments have come under legal challenge from corporations concerned that public policymaking is denying them revenues.
In spring 2014, UN official and human rights lawyer Alfred de Zayas called for a moratorium on TTIP negotiations until ISDS was excluded. He warned that the secret court tribunals held to settle trade disputes were undemocratic. Their reliance on a small group of specialist lawyers also meant that arbitrators sitting in judgment were the ones who at other times represented corporate clients.
De Zayas feared that smaller states would find themselves in the same position as many governments in trade disputes, suffering huge legal bills and long delays to public policy reforms. He was joined in his mission by NGOs and, most importantly, by MEPs in Strasbourg.
As a first concession, the US side agreed to prohibit “brass-plate” firms – those that exist only by name in a county, without any employees or activity – from suing a government. This aimed to prevent a repeat of the Australia incident when the Ukrainian arm of tobacco firm Philip Morris, effectively a brass-plate entity, spearheaded the attack on plain packaging.
European commissioner Cecilia Malmström has proposed an international court of arbitration to settle investor disputes. Photograph: Emmanuel Dunand/Getty
Many EU politicians said this concession was too easy to circumvent, leaving corporations in a powerful position. So Europe’s chief negotiator, Swedish commissioner Cecilia Malmström, hatched a scheme for an international court of arbitration – an open public forum instead of the private court system. Even her critics said it was a bold move, and unlikely to be accepted by the Americans.
Washington has countered with proposals for a more transparent ISDS court, with live-streamed meetings and the publication of all documents. Not enough, says de Zayas, who wrote recently: “Alas, countless ISDS awards have shown a business bias that shocks the conscience. To the extent that the procedures are not transparent, the arbitrators are not always independent and the annulment procedure is nearly useless, ISDS should be abolished as incompatible with article 14(1) of the ICCPR [International Covenant on Civil and Political Rights] which requires that all suits at law be decided by independent and competent tribunals under the rule of law.”
The two sides have yet to formally discuss either proposal: under deals between the US and Japan and the EU and Canada the issue was barely mentioned, but it is now expected to be among the most contentious.
Regulations
Michael Froman, the US chief negotiator, described the task of harmonising regulations as follows: “For years the US and EU have accepted each other’s inspection of aeroplanes because it was obvious they would not be able to check all the planes landing in their jurisdiction. We seek to expand this practice to other areas.”
So how would Froman apply this to the fact that American cars will still be left-hand drive, restricting their use on British roads? He argues that the cost of imported cars, research and development and testing can still benefit from the harmonisation of regulations on either side of the Atlantic.
Yet there is nothing US food regulators would like less than to accept processed foods tested by EU officials who failed to spot the horsemeat scandal.
And EU regulators are duty bound to reject GM foods, after sustained protests by Europe’s consumers in direct conflict with US farmers. Washington claims it will accept the science when it applies to regulations, which supports GM foods being accepted by the EU as part of TTIP, just as it is part of the WTO agreement.
Labour standards and workers’ rights
Japanese trade unions supported the TPP deal, and unions in Europe are expected to follow suit with TTIP. They accept that labour protection rules lie outside the scope of a deal, and that their governments can therefore continue to implement minimum wage legislation and other supportive measures without being sanctioned.
But unions, where they exist, tend to represent workers in successful industries, which naturally welcome access to wider markets. Workers in weaker areas of the economy could find their jobs coming under pressure from harmonised regulations, lower tariffs, or even just exposure to a US rival with a work ethic that denies most employees more than two weeks’ holiday a year.
TTIP is important to the UK government because the US is our biggest market for goods and services outside the EU. It’s seen as especially important for small and medium-sized businesses, which appreciate the lack of language barrier. Britain also has a trade surplus with the US: we export more than we import, which helps counterbalance the country’s huge trade deficit.
Such is the momentum behind the talks that a deal could be agreed by the end of the year, and go before Congress and EU parliaments in 2017. Both sides claim to be making good progress. But the dispute over ISDS and protests from farmers could yet quash Obama’s hopes for US olive oil sales.
The EU claims it will create millions of jobs and bring down the cost of living – but others say it is a threat to public services such as the NHS
An anti-TTIP banner is held aloft at a rally before the G7 summit in Munich in June. Photograph: Wolfgang Rattay/Reuters
If you are not yet familiar with the acronym TTIP it is likely you soon will be. TheTransatlantic Trade and Investment Partnership is a proposed trade agreement and the subject of an ongoing series of negotiations between the EU and US aimed at creating the world’s biggest free trade zone spanning the north Atlantic.
It would dwarf all past free trade deals: the European commission reckons it could boost the size of the EU economy by €120bn (£85bn) – equal to 0.5% of GDP – and the US economy by €95bn – 0.4% of GDP.
It would create several million jobs dependent on exports, Brussels says, while consumers would enjoy cheaper products and services. The average European household of four would be around €500 a year better off as a result of wage increases and price reductions, according to the study commissioned from the Centre for Economic Policy Research in 2013.
The plan is to cut tariff barriers – levies imposed to control cross-border trade – to zero and other non-tariff barriers by 25-50%. The study insists this is a realistic prospect. The business sectors that would benefit most include industries based around metal products, processed food and chemicals, and especially the motor industry.
In the UK (and elsewhere), the main beneficiaries would be big businesses, as smaller firms are less likely to trade outside Britain. The UK could benefit to the tune of £10bn, which means the average household would be £400 a year better off.
The main aim of TTIP is to reduce regulatory barriers to trade, in areas ranging from food safety law to environmental rules and banking regulations. Opponents argue it will water down important EU regulations.
Food safety has become a major stumbling block in the negotiations as both sides prepare for the latest round – the 10th – which takes place from 13 to 17 July in Brussels.
The talks have been conducted largely in secret, but opposition to TTIP is growing on the ground. More than 2 million people in Europe have signed an online petition against the proposed deal. Campaigners have been outspoken about TTIP’s potential dangers and have painted it as a threat to European democracy.
In Britain, MPs on the all-party business, innovations and skills committee havedenounced the government’s firm support for TTIP amid fears for the NHS and other public services.
Concerns are mounting that TTIP could lead to more privatisation, with the prospect of US corporations providing vital UK public services such as transport, education, water and health.
If you are not yet familiar with the acronym TTIP it is likely you soon will be. TheTransatlantic Trade and Investment Partnership is a proposed trade agreement and the subject of an ongoing series of negotiations between the EU and US aimed at creating the world’s biggest free trade zone spanning the north Atlantic.
It would dwarf all past free trade deals: the European commission reckons it could boost the size of the EU economy by €120bn (£85bn) – equal to 0.5% of GDP – and the US economy by €95bn – 0.4% of GDP.
It would create several million jobs dependent on exports, Brussels says, while consumers would enjoy cheaper products and services. The average European household of four would be around €500 a year better off as a result of wage increases and price reductions, according to the study commissioned from the Centre for Economic Policy Research in 2013.
The plan is to cut tariff barriers – levies imposed to control cross-border trade – to zero and other non-tariff barriers by 25-50%. The study insists this is a realistic prospect. The business sectors that would benefit most include industries based around metal products, processed food and chemicals, and especially the motor industry.
In the UK (and elsewhere), the main beneficiaries would be big businesses, as smaller firms are less likely to trade outside Britain. The UK could benefit to the tune of £10bn, which means the average household would be £400 a year better off.
The main aim of TTIP is to reduce regulatory barriers to trade, in areas ranging from food safety law to environmental rules and banking regulations. Opponents argue it will water down important EU regulations.
Food safety has become a major stumbling block in the negotiations as both sides prepare for the latest round – the 10th – which takes place from 13 to 17 July in Brussels.
The talks have been conducted largely in secret, but opposition to TTIP is growing on the ground. More than 2 million people in Europe have signed an online petition against the proposed deal. Campaigners have been outspoken about TTIP’s potential dangers and have painted it as a threat to European democracy.
In Britain, MPs on the all-party business, innovations and skills committee havedenounced the government’s firm support for TTIP amid fears for the NHS and other public services.
Concerns are mounting that TTIP could lead to more privatisation, with the prospect of US corporations providing vital UK public services such as transport, education, water and health.
As highlighted in this Guardian video, another major concern is whether standards will drop. For example, the EU bans cosmetics tested on animals but the US does not. Another question is what happens if EU countries want some protection, for instance Italy for its Parma ham, and the UK for its pork pies.
One of the most controversial elements of the trade proposal is the Investor State Dispute Settlement (ISDS) provision. ISDS provisions have been included in many trade deals since the 1980s, to encourage overseas investment in poorer countries. It means private investors can ask a tribunal of international arbitratorsto judge if a government has treated them unfairly – and can get compensation.
Over the past decade some big, mainly American companies, such as tobacco conglomerate Philip Morris, have used ISDS to claim rights. The provision would in theory allow private investors to sue governments for the loss of future profits due to decisions made by national parliaments. Critics say it could be used to attack the UK’s NHS by making privatisations of specific services harder to reverse.
-----
TTIP: the key to freer trade, or corporate greed?
Some say the US/EU trade deal that could be agreed this year will open up markets and promote UK growth. Others fear it will drive down wages and promote privatisation
Philip Inman in The Guardian
Cheap American olive oil could, in a few years’ time, be sitting on supermarket shelves next to the Tuscan single estate varieties loved by British foodies. At present a prohibitive tariff on US imports effectively prices them out of contention.
But a groundbreaking trade deal could lower the $1,680-a-tonne tariff on US olive oil to match the $34 a tonne the US charges on imports from the EU. Or the tariffs could disappear altogether. Either way, Greek, Spanish and Italian olive farmers must fear the Transatlantic Trade and Investment Partnership (TTIP), a deal that aims to create a level playing field between them and massive US agri-businesses.
Trade deals were once seen as a panacea for global poverty. In the 1990s, the World Trade Organisation was formed to harmonise cross-border regulations on everything from cars to pharmaceuticals and cut tariffs in order to promote the free flow of goods and services around the world.
There was always a fear that, far from being a winning formula for all, lower tariffs would favour the rich and powerful and crucify small producers, who would struggle to compete in an unprotected environment.
The effects of the North American Free Trade Agreement (Nafta), signed by the US, Mexico and Canada in 1993, appeared to justify that fear: it became in later years a cause celebre for anti-poverty campaigners, angered by the plight of Mexican workers. Not only were they subjected to low wages and poor working conditions by newly relocated US corporations – and, as consumers, to the relentless marketing power of Walmart, Coca Cola and the rest – but the major fringe benefit of cutting corruption remained illusory.
This year the US hopes to sign what many believe will be Nafta’s direct successor – TTIP. Should it get the green light from Congress and the EU commission, the agreement will be a bilateral treaty between Europe and the US, and, just like Nafta before it, outside the ambit of a gridlocked WTO.
Supporters say it will be an improvement on its predecessor because the main proponents are a liberal US president and a European commission that considers itself concerned with workers and consumers. Why, the commission asks, would 28 relatively affluent member states with concerns about high unemployment, stagnant wages, welfare provision and climate change agree to a charter that undermines workers’ rights, attacks public services or reduces environmental regulations?
TTIP is also billed as an agreement between equals that allows both sides to promote trade: it is claimed that the UK’s national income could be raised by £4bn-£10bn annually, or up to £100bn over 10 years. That amounts to a 0.3 percentage point boost to GDP, which would have pushed this year’s expected 2.4% growth to 2.7%.
An anti-TTIP demonstration in Berlin this year. Photograph: Wolfram Steinberg/EPA
But it strikes fear into the hearts of many, who believe it to be a Trojan horse for rapacious corporations. These corporations, hellbent on driving down costs to enhance shareholder value, spell the end for Europe’s cosy welfare states and their ability to shield fledgling or, in the case of steel and coal, declining industries from the harsh realities of open competition.
TTIP has been compared to the 1846 Corn Law abolition, which either swept away protectionist tariffs that impoverished millions of workers, or protected a vital source of food and led Karl Marx to ask: “What is free trade under the present condition of society?” His answer was: “It is the freedom which capital has to crush the worker.” Is that the case with TTIP? Here are five key factors to consider.
Health and public services
From the moment TTIP became part of President Barack Obama’s growth strategy, critics have feared that he little realised the expansionary intentions of US healthcare companies or was too distracted to care. The concern relates to the prospect of EU countries, under pressure from rising healthcare costs, handing over major parts of healthcare provision to the private sector. Once services are in private hands, say critics, TTIP rules will prevent them being taken back into state control.
Since these fears were voiced, trade negotiators have excluded provisions that would have allowed firms to sue governments for the loss of health and public services contracts once they expired. This allows the UK’s rail franchise system and the contracting-out of health services to continue under time-limited contracts.
But the US private health industry, which is the largest in the world, views a Europe struggling with the needs of an ageing baby-boomer generation as ripe for the picking. For this reason alone, contracting out the distribution of drugs, the supply of medical devices and the provision of vital services could prove irresistible.
Dispute resolution
A little known facet of every trade deal is a separate form of arbitration for the businesses covered by the agreement, allowing them to avoid the civil courts. As such, the investor-state dispute resolution (ISDS) gives foreign investors the power to sue a government for introducing legislation that harms their investment.
Famously, it was used by big tobacco to sue the Australian government when it introduced plain cigarette packaging. Before and after the scandal, other governments have come under legal challenge from corporations concerned that public policymaking is denying them revenues.
In spring 2014, UN official and human rights lawyer Alfred de Zayas called for a moratorium on TTIP negotiations until ISDS was excluded. He warned that the secret court tribunals held to settle trade disputes were undemocratic. Their reliance on a small group of specialist lawyers also meant that arbitrators sitting in judgment were the ones who at other times represented corporate clients.
De Zayas feared that smaller states would find themselves in the same position as many governments in trade disputes, suffering huge legal bills and long delays to public policy reforms. He was joined in his mission by NGOs and, most importantly, by MEPs in Strasbourg.
As a first concession, the US side agreed to prohibit “brass-plate” firms – those that exist only by name in a county, without any employees or activity – from suing a government. This aimed to prevent a repeat of the Australia incident when the Ukrainian arm of tobacco firm Philip Morris, effectively a brass-plate entity, spearheaded the attack on plain packaging.
European commissioner Cecilia Malmström has proposed an international court of arbitration to settle investor disputes. Photograph: Emmanuel Dunand/Getty
Many EU politicians said this concession was too easy to circumvent, leaving corporations in a powerful position. So Europe’s chief negotiator, Swedish commissioner Cecilia Malmström, hatched a scheme for an international court of arbitration – an open public forum instead of the private court system. Even her critics said it was a bold move, and unlikely to be accepted by the Americans.
Washington has countered with proposals for a more transparent ISDS court, with live-streamed meetings and the publication of all documents. Not enough, says de Zayas, who wrote recently: “Alas, countless ISDS awards have shown a business bias that shocks the conscience. To the extent that the procedures are not transparent, the arbitrators are not always independent and the annulment procedure is nearly useless, ISDS should be abolished as incompatible with article 14(1) of the ICCPR [International Covenant on Civil and Political Rights] which requires that all suits at law be decided by independent and competent tribunals under the rule of law.”
The two sides have yet to formally discuss either proposal: under deals between the US and Japan and the EU and Canada the issue was barely mentioned, but it is now expected to be among the most contentious.
Regulations
Michael Froman, the US chief negotiator, described the task of harmonising regulations as follows: “For years the US and EU have accepted each other’s inspection of aeroplanes because it was obvious they would not be able to check all the planes landing in their jurisdiction. We seek to expand this practice to other areas.”
So how would Froman apply this to the fact that American cars will still be left-hand drive, restricting their use on British roads? He argues that the cost of imported cars, research and development and testing can still benefit from the harmonisation of regulations on either side of the Atlantic.
Yet there is nothing US food regulators would like less than to accept processed foods tested by EU officials who failed to spot the horsemeat scandal.
And EU regulators are duty bound to reject GM foods, after sustained protests by Europe’s consumers in direct conflict with US farmers. Washington claims it will accept the science when it applies to regulations, which supports GM foods being accepted by the EU as part of TTIP, just as it is part of the WTO agreement.
Tariffs
Dispensing with tariffs seems like a straightforward process compared with tackling complex regulations. Under TTIP, tariffs on goods and services should disappear, though it is expected that some will only be reduced, and others may take years to go the way of history.
Under the Trans Pacific Partnership (TPP) recently agreed, but not yet implemented, between the US, Japan, Australia, Vietnam and other East Asian countries, all goods, from pork to cars, are covered.
A good example of how long it can take for tariffs to come down is found in the case of the 2.5% rate slapped on Japanese car imports to the US: this will start to be incrementally lowered 15 years after the agreement takes effect, halved in 20 years and eliminated in 25 years. In return, Japan will, among other things, lower its tariff on imported beef from 38.5% to 9% over 16 years. A similar programme could be possible under TTIP, with olive oil tariffs lowered over 25 years.
Dispensing with tariffs seems like a straightforward process compared with tackling complex regulations. Under TTIP, tariffs on goods and services should disappear, though it is expected that some will only be reduced, and others may take years to go the way of history.
Under the Trans Pacific Partnership (TPP) recently agreed, but not yet implemented, between the US, Japan, Australia, Vietnam and other East Asian countries, all goods, from pork to cars, are covered.
A good example of how long it can take for tariffs to come down is found in the case of the 2.5% rate slapped on Japanese car imports to the US: this will start to be incrementally lowered 15 years after the agreement takes effect, halved in 20 years and eliminated in 25 years. In return, Japan will, among other things, lower its tariff on imported beef from 38.5% to 9% over 16 years. A similar programme could be possible under TTIP, with olive oil tariffs lowered over 25 years.
Labour standards and workers’ rights
Japanese trade unions supported the TPP deal, and unions in Europe are expected to follow suit with TTIP. They accept that labour protection rules lie outside the scope of a deal, and that their governments can therefore continue to implement minimum wage legislation and other supportive measures without being sanctioned.
But unions, where they exist, tend to represent workers in successful industries, which naturally welcome access to wider markets. Workers in weaker areas of the economy could find their jobs coming under pressure from harmonised regulations, lower tariffs, or even just exposure to a US rival with a work ethic that denies most employees more than two weeks’ holiday a year.
TTIP is important to the UK government because the US is our biggest market for goods and services outside the EU. It’s seen as especially important for small and medium-sized businesses, which appreciate the lack of language barrier. Britain also has a trade surplus with the US: we export more than we import, which helps counterbalance the country’s huge trade deficit.
Such is the momentum behind the talks that a deal could be agreed by the end of the year, and go before Congress and EU parliaments in 2017. Both sides claim to be making good progress. But the dispute over ISDS and protests from farmers could yet quash Obama’s hopes for US olive oil sales.
Tuesday, 4 August 2015
What is TTIP and why should we be angry about it?
Anti-TTIP graffiti in Brussels, Belgium. Photograph: Francois Lenoir/Reuters
Stuart Jeffries in The Guardian
“Sometimes,” says a character in David Foster Wallace’s novel The Pale King, “what’s important is dull. Sometimes it’s work. Sometimes the important things aren’t works of art for your entertainment.” It is worth bearing that in mind as we consider TTIP, the most boring thing we’re supposed to get angry about since – ooh … was it PFI schemes that nobbled hospitals, eviscerated schools and left Britain £222bn in debt? Or was it the asymmetrical constitutional ramifications inherent in the West Lothian question? Or George Osborne’s incomprehensible pension changes involving auto-enrolment annuities, tax wrappers, pots and draw-downs? Christine Lagarde’s last press conference about the Greek debt crisis? Maybe it was your last mobile phone bill.
Stuart Jeffries in The Guardian
“Sometimes,” says a character in David Foster Wallace’s novel The Pale King, “what’s important is dull. Sometimes it’s work. Sometimes the important things aren’t works of art for your entertainment.” It is worth bearing that in mind as we consider TTIP, the most boring thing we’re supposed to get angry about since – ooh … was it PFI schemes that nobbled hospitals, eviscerated schools and left Britain £222bn in debt? Or was it the asymmetrical constitutional ramifications inherent in the West Lothian question? Or George Osborne’s incomprehensible pension changes involving auto-enrolment annuities, tax wrappers, pots and draw-downs? Christine Lagarde’s last press conference about the Greek debt crisis? Maybe it was your last mobile phone bill.
Add up the boredom you experienced on each of those occasions, multiply the result by the international coefficient of tedium (which, as you know, is 27.5) and that’s how bored the international trade deal known as TTIP will make you.
The Guardian’s expert on obfuscation by bureaucratese and acronym, Steven Poole, recently argued that TTIP could be a conspiracy to pull some very thick wool over our eyes. We live in an age when we’re so accustomed to being entertained that we haven’t the temperament to do the difficult work of penetrating the wool of boring. So we’re going to take that wool, roll it into a ball and leave it for the cat to play with. No, don’t look at the cat. Look at me. Focus.
FacebookTwitterPinterest Ignacio Garcia Bercero (left), the EU chief negotiator for TTIP, and his US counterpart Dan Mullaney. Photograph: Thierry Charlier/AFP/Getty Images
So, what is TTIP?
So, what is TTIP?
Remember when acronyms starting with two TTs were lovely things such as TTFN (ta-ta for now)? TTIP isn’t like that. It stands for Transatlantic Trade and Investment Partnership. Last month, the European parliament voted to allow the European commission to continue negotiations with the United States to create the world’s largest free-trade zone, which is what TTIP is all about.
Conservative trade spokesman Emma McClarkin said: “I welcome the fact that, following weeks of parliamentary ping-pong and attempts by socialist and protectionist MEPs to derail the process, we finally have a clear backing for TTIP.” Right, stop thinking how much fun parliamentary ping-pong sounds, particularly if a cat joins in.
What McClarkin is looking forward to is greater regulatory harmonisation and a consequent boost for business, some of it, incredibly, British. Today, for instance, the US and EU have different regulations testing the safety of cars, drugs and soft furnishings. That imposes costs on transatlantic exporters of cars, drugs and soft furnishings – especially, you would think, on exporters of upholstery for drug dealers’ cars. One possible consequence of harmonisation could be a boost for British car exports. Imagine: one day Americans will be driving trim little Nissans made in Sunderland rather than ludicrous Hummers concocted in the bowels of hell.
There are other projected benefits. US ambassador to the EU Anthony L Gardner argues that TTIP is, if you’ll pardon the expression, geopolitically pertinent, and that it would “provide an economic equivalent to Nato” that would settle “the rules of world trade before others do it for us”. Think about it this way: right now, Vladimir Putin can, if he chooses, strip to the waist for a photo op in which he turns off the gas pipe from Russia to Europe. That’s not good enough. Instead of being dependent on nasty Russian gas and oil, then, as a result of TTIP, the EU might become dependent on lovely American and Canadian gas and oil. That’s one reason behind the EU’s call for a dedicated chapter in TTIP on energy and raw materials. Instead of Russia isolating the EU, the EU could isolate Russia. Sweet.
We have been invited to pronounce TTIP “tea tip”. Don’t these knuckleheads have any sense of history? The world’s most famous tea tip was in Boston in 1773, and that resulted in the marvellous era of transatlantic cooperation known as the American War of Independence.
TTIP is not to be confused with TPP, which is the Trans-Pacific Partnership, involving 12 countries including the US, Australia and Brunei, and which, like TTIP, is still under negotiation.
There is also, incidentally, something called Ceta, which stands for Comprehensive Economic and Trade Agreement. It is like TTIP but for Canada and Europe and, so far as I understand it, means that Europeans will soon be bathing in maple syrup while reading Margaret Atwood novels. Which is probably nicer than it sounds. Ceta is due to be ratified by the European parliament later this year but the document is currently undergoing a process of what is called “legal scrubbing”, which sounds like the sort of thing Americans do to their chickens, but in fact is another species of the kind of gobbledegook rampant in modern life and means minimising the document’s exposure to legal action.
But that’s not all. There is also Nafta, the North American Free Trade Agreement. It was established in 1994 and, proponents of TTIP think, demonstrates the kind of inspiring benefits and harmonisation of standards that might result if TTIP comes into force. Think of it this way. Just as, thanks to Nafta, for the past 21 years Americans have been saying “aboot” and forming their own mariachi bands, Mounties have been wearing sombreros and Mexicans putting maple syrup on their quesadillas, so in the future, thanks to TTIP, Americans might drink coffee from cups the size of thimbles, while Europeans might wear 10-gallon hats even though, on average, we’ve only got six-gallon-sized heads and so would look ridiculous.
But seriously. How is TTIP going to affect me?
TTIP will hit Europeans like you in the pocket, critics argue, so you need to pay attention. While the European commission estimates that, by 2027, TTIP could boost the size of the EU economy by £94bn or 0.5% of GDP, an economic study by Jeronim Capaldo of the Global Development and Environment Institute at Tufts University argues that the commission’s econometric modelling is jejune and that, in fact, TTIP will clobber Europeans. Capaldo predicts 600,000 European job losses as a result of TTIP, a net fall in EU exports, declining GDPs for EU member states and a fall in Europeans’ personal income.
Why people are so angry about TTIP?
Because Americans are, with all due respect, disgusting slobs always chasing a fast buck and thus very different from us fragrant Europeans who are, like Mary Poppins, practically perfect in every way. One worry is that the main goal of TTIP is to remove EU regulations that stop its citizens being poisoned, killed or subject to rampant pollution so that more profits can be made by corporations on both sides of the Atlantic.
Because Americans are, with all due respect, disgusting slobs always chasing a fast buck and thus very different from us fragrant Europeans who are, like Mary Poppins, practically perfect in every way. One worry is that the main goal of TTIP is to remove EU regulations that stop its citizens being poisoned, killed or subject to rampant pollution so that more profits can be made by corporations on both sides of the Atlantic.
Do you have concerns about TTIP?
For instance, critics argue that if TTIP involves, as the EU hopes, a commitment that would guarantee automatic licences for all future US crude oil and gas exports to Europe, that would result in a boom in US fracking to keep Europeans powered with shale gas, not to mention greater exploitation of oil from Canadian tar sands. Such developments, argue critics, would undermine not just the EU’s fuel quality directive but ruin what is left of the planet worth ruining.
Consider one aspect of TTIP that is giving European critics the particular pip. It involves another acronym, so steel yourselves. That acronym is ISDS, which stands for “investor-state dispute settlement”. This procedure would allow companies to sue foreign governments over claims of unfair treatment and to be entitled to compensation. Similar provisions in other treaties have allowed, for example, tobacco conglomerate Philip Morris to sue Uruguay and Australia for enacting anti-smoking legislation, and a Swedish energy company to take legal action against Germany for phasing out nuclear power.
An American chicken farm … US food is subject to different regulations. Photograph: Scott Olson/Getty Images
Critics say ISDS provisions undermine the power of national governments to act in the interests of their citizens. According to John Hilary, the executive director of War on Want, leaked documents show that medical and health services, social services, education, post, finance, telecommunications, transport, energy, water, environmental and cultural services are all on the table in TTIP, meaning that American corporations may have full access to them.
That is why there is a big banner outside the US embassy in Berlin that says (try saying this in the whiniest German voice you can muster): “Demokratie ist keine Handelsware,” which means democracy is not for trading.. Of course there is. It is also why there is some unacceptably unfunny graffiti in Malmö that depicts Barack Obama grinning oleaginously as a wooden horse marked TTIP is dragged into Europe.
In the UK, there are fears that ISDS could threaten the NHS because it might allow private firms running hospital services to sue the government if it chose to return the services to the public sector. The French government has already negotiated its film industry’s exemption from these provisions, so why can’t the NHS be, critics ask?
But the idea that ISDS is subverting democracy in favour of wicked corporations is a conspiracy theory, argues the European Policy Information Center, which – unforgivably – is already spelling “centre” the American way. Epicenter (as this group is acronymically known) is made up of groups, such as the UK’s Institute of Economic Affairs, that are in favour of TTIP. It argues that we shouldn’t worry about ISDS provisions. Why? Because the clause is a time-honoured means whereby corporations protect their investments, and does not undermine EU or member states’ right to pursue legitimate public policy objectives.
Or consider food regulations. While the EU has an impressively alliterative “farm to fork” strategy, for instance, regulating each link in the food chain, Americans pump their cattle and pigs with growth-promoting hormones banned in the EU. As a result, most US beef can’t be sold in the EU.
Worse, Americans use 82 pesticides banned in the EU. They wash their chicken in chlorinated water to kill bacteria. Ninety per cent of their soya, cotton and corn is genetically modified, while the EU allows member states to ban GM production. France, for instance, has banned GM, and Gauloises-smoking, beret-wearing toughs now patrol French fields to ensure that the excrescence of GM never sullies la belle France again.
So how could we possibly abandon these glorious European standards? The spectre of what lavishly moustachioed French farmer/anti-globalisation activist José Bové calls la malbouffe Americaine (rubbish American food) lurks behind the fears of this trading alliance. “Yeah?” retort Americans. “So how come you dumbass Europeans got mired in a horse-meat scandal in 2013 if your food regulations are so darn tootin’?” Which, you have to admit, is a good comeback.
Or consider data privacy rights. Don’t Americans realise that us Europeans don’t care to be snooped on by the NSA or have Google peer 24/7 into our very souls? MEPs are worried that TTIP might undermine EU data protection laws, and that’s why they have called for an “unambiguous, horizontal, self-standing provision” in it to guarantee citizens’ right to privacy.
Can something be horizontal and self-standing at the same time, you ask? It seems, I concede, unlikely.
A nurse holds a bag of saline solution … There are fears that trade deals could threaten the NHS. Photograph: Dimitris Legakis/Athena Pictures
Who is angry about TTIP?
Groups as disparate as War on Want and Ukip are united in anger about TTIP, though for different reasons. The Institute of Economic Affairs and the Conservative party are united in not being angry. The Labour party is – surprise! – conflicted.
Let’s consider Labour first. Labour MEP Jude Kirton-Darling, while arguing that ISDS is a “para-judicial and opaque system of private arbitration [that] allows companies to sue governments at great cost to the taxpayer”, also says that TTIP “could present us with a unique chance to regulate globalisation and to promote EU standards”, as well as “providing a much-needed boost to local economies, support to SMEs and new and exciting jobs and training opportunities”.
As for Ukip, Farage and his chums oppose TTIP because they think it’s a smokescreen. It’s not about trade, stupid, it’s about promoting “the political pretensions of a wannabe European superstate” and “setting up a parallel system that undermines national courts and national legal systems”, as the party’s international trade spokesman William Dartmouth MEP said in the European parliament last month.
After the vote went against Ukip’s stance last week, Dartmouth said that the only way citizens can defeat TTIP now is to vote to leave the European Union. But that’s Ukip’s answer to everything.
As for War on Want, its views are more typical of the pressure groups, unions, charities, NGOs and environmentalists that oppose TTIP. There are, for example, 480 such groups affiliated to the Berlin-based Stop TTIP campaign, whose supporting organisations include trade unions like the NUT, NGOs such as Friends of the Earth and Greenpeace and, my personal favourite, the Pirate Parties of Greece, Germany, Slovenia and the Netherlands, which have no leaders but a splendid flag. The campaign has a 2.3 million-signature petition calling on the EU to “stop these sinister trade deals”, by which it means both TTIP and CETA.
One of War On Want’s major concerns is that TTIP is being negotiated in secret. And with good cause: what nobody seems to have pointed out yet is that if TTIP negotiations do continue, as expected, until next year at the earliest, often in secret with (I suspect) all sorts of complicated car switcheroos, dead letter drops and tooled-up security johnnies in shades talking furtively into their wrists, the costs of negotiations might outweigh any supposed benefits of what they’re negotiating about.
But are TTIP negotiations being conducted in secret? Giacomo Lev Mannheimer of Istituto Bruno Leoni argues that is another conspiracy theory. And, indeed, he points to the dismal truth that there are lots and lots and lots of TTIP-related documents about its benefits, impact on public services, food and agriculture rules. Mannheimer makes a good point, though critics argue that the real meat of negotiations takes place elsewhere and ordinary European citizens don’t get a say in them.
What Mannheimer doesn’t consider is the more disturbing truth that there is an inverse relationship between the number of funny videos on YouTube and the user traffic on European commission websites relating to TTIP.
Indeed, if TTIP is about liberalising the parameters of boring, there are some of us who are prepared to fight back. And when I say “fight back”, I mean kick back on a sofa watching kittens get tickled.
Let’s consider Labour first. Labour MEP Jude Kirton-Darling, while arguing that ISDS is a “para-judicial and opaque system of private arbitration [that] allows companies to sue governments at great cost to the taxpayer”, also says that TTIP “could present us with a unique chance to regulate globalisation and to promote EU standards”, as well as “providing a much-needed boost to local economies, support to SMEs and new and exciting jobs and training opportunities”.
As for Ukip, Farage and his chums oppose TTIP because they think it’s a smokescreen. It’s not about trade, stupid, it’s about promoting “the political pretensions of a wannabe European superstate” and “setting up a parallel system that undermines national courts and national legal systems”, as the party’s international trade spokesman William Dartmouth MEP said in the European parliament last month.
After the vote went against Ukip’s stance last week, Dartmouth said that the only way citizens can defeat TTIP now is to vote to leave the European Union. But that’s Ukip’s answer to everything.
As for War on Want, its views are more typical of the pressure groups, unions, charities, NGOs and environmentalists that oppose TTIP. There are, for example, 480 such groups affiliated to the Berlin-based Stop TTIP campaign, whose supporting organisations include trade unions like the NUT, NGOs such as Friends of the Earth and Greenpeace and, my personal favourite, the Pirate Parties of Greece, Germany, Slovenia and the Netherlands, which have no leaders but a splendid flag. The campaign has a 2.3 million-signature petition calling on the EU to “stop these sinister trade deals”, by which it means both TTIP and CETA.
One of War On Want’s major concerns is that TTIP is being negotiated in secret. And with good cause: what nobody seems to have pointed out yet is that if TTIP negotiations do continue, as expected, until next year at the earliest, often in secret with (I suspect) all sorts of complicated car switcheroos, dead letter drops and tooled-up security johnnies in shades talking furtively into their wrists, the costs of negotiations might outweigh any supposed benefits of what they’re negotiating about.
But are TTIP negotiations being conducted in secret? Giacomo Lev Mannheimer of Istituto Bruno Leoni argues that is another conspiracy theory. And, indeed, he points to the dismal truth that there are lots and lots and lots of TTIP-related documents about its benefits, impact on public services, food and agriculture rules. Mannheimer makes a good point, though critics argue that the real meat of negotiations takes place elsewhere and ordinary European citizens don’t get a say in them.
What Mannheimer doesn’t consider is the more disturbing truth that there is an inverse relationship between the number of funny videos on YouTube and the user traffic on European commission websites relating to TTIP.
Indeed, if TTIP is about liberalising the parameters of boring, there are some of us who are prepared to fight back. And when I say “fight back”, I mean kick back on a sofa watching kittens get tickled.
Friday, 7 November 2014
The British government is leading a gunpowder plot against democracy
This bill of corporate rights threatens to blow the sovereignty of parliament unless it can be stopped
On this day a year ago, I was in despair. A dark cloud was rising over the Atlantic, threatening to blot out some of the freedoms our ancestors lost their lives to secure. The ability of parliaments on both sides of the ocean to legislate on behalf of their people was at risk from an astonishing treaty that would grant corporations special powers to sue governments. I could not see a way of stopping it.
Almost no one had heard of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, except those who were quietly negotiating it. And I suspected that almost no one ever would. Even the name seemed perfectly designed to repel public interest. I wrote about it for one reason: to be able to tell my children that I had not done nothing.
To my amazement, the article went viral. As a result of the public reaction and the involvement of remarkable campaigners, the European commission and the British government responded. The Stop TTIP petition now carries more than 750,000 signatures; the 38 Degrees petition has 910,000. Last month there were 450 protest actions across 24 member states. The commission was forced to hold a public consultation about the most controversial aspect, and 150,000 people responded. Never let it be said that people cannot engage with complex issues.
Nothing has yet been won. Corporations and governments – led by the UK – are mobilising to thwart this uprising. But their position slips a little every month. When the British minister responsible at the time, Ken Clarke, responded to my first articles, he insisted that “nothing could be more foolish” than making the European negotiating position public, as I’d proposed. But last month the commission was obliged to do just this. It’s beginning to look as if the fight against TTIP could become a historic victory for people against corporate power.
The central problem is what the negotiators call investor-state dispute settlement (ISDS). The treaty would allow corporations to sue governments before an arbitration panel composed of corporate lawyers, at which other people have no representation, and which is not subject to judicial review.
Already, thanks to the insertion of ISDS into much smaller trade treaties, big business is engaged in an orgy of litigation, whose purpose is to strike down any law that might impinge on its anticipated future profits. The tobacco firm Philip Morris is suing governments in Uruguay and Australia for trying to discourage people from smoking. The oil firm Occidental was awarded $2.3bn in compensation from Ecuador, which terminated the company’s drilling concession in the Amazon after finding that Occidental had broken Ecuadorean law. The Swedish company Vattenfall is suing the German government for shutting down nuclear power. An Australian firm is suing El Salvador’s government for $300m for refusing permission for a goldmine over concerns it would poison the drinking water.
The same mechanism, under TTIP, could be used to prevent UK governments from reversing the privatisation of the railways and the NHS, or from defending public health and the natural world against corporate greed. The corporate lawyers who sit on these panels are beholden only to the companies whose cases they adjudicate, who at other times are their employers.
As one of these people commented: “When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”
So outrageous is this arrangement that even the Economist, usually the champion of corporate power and trade treaties, has now come out against it. It calls investor-state dispute settlement “a way to let multinational companies get rich at the expense of ordinary people”.
When David Cameron and the corporate press launched their campaign against the candidacy of Jean-Claude Juncker for president of the European commission, they claimed that he threatened British sovereignty. It was a perfect inversion of reality. Juncker, seeing the way the public debate was going, promised in his manifesto that “I will not sacrifice Europe’s safety, health, social and data protection standards … on the altar of free trade … Nor will I accept that the jurisdiction of courts in the EU member states is limited by special regimes for investor disputes.” Juncker’s crime was that he had pledged not to give away as much of our sovereignty to corporate lawyers as Cameron and the media barons demanded.
Juncker is now coming under extreme pressure. Last month 14 states wrote to him, privately and without consulting their parliaments, demanding the inclusion of ISDS (the letter was leaked a few days ago). And who is leading this campaign? The British government. It’s hard to get your head around the duplicity involved. While claiming to be so exercised about our sovereignty that it is prepared to leave the EU, our government is secretly insisting that the European commission slaughter our sovereignty on behalf of corporate profits. Cameron is leading a gunpowder plot against democracy.
He and his ministers have failed to answer the howlingly obvious question: what’s wrong with the courts? If corporations want to sue governments, they already have a right to do so, through the courts, like anyone else. It’s not as if, with their vast budgets, they are disadvantaged in this arena. Why should they be allowed to use a separate legal system, to which the rest of us have no access? What happened to the principle of equality before the law?
If our courts are fit to deprive citizens of their liberty, why are they unfit to deprive corporations of anticipated future profits? Let’s not hear another word from the defenders of TTIP until they have answered this question.
It cannot be ducked for much longer. Unlike previous treaties, this one is being dragged by campaigners into the open, where its justifications shrivel on exposure to the light. There’s a tough struggle to come, and the outcome is by no means certain, but my sense is that we will win.
Tuesday, 11 March 2014
Give and take in the EU-US trade deal? Sure. We give, the corporations take
I have three challenges for the architects of a proposed transatlantic trade deal. If they reject them, they reject democracy
Illustration by Daniel Pudles
Nothing threatens democracy as much as corporate power. Nowhere do corporations operate with greater freedom than between nations, for here there is no competition. With the exception of the European parliament, there is no transnational democracy, anywhere. All other supranational bodies – the International Monetary Fund, the World Bank, the United Nations, trade organisations and the rest – work on the principle of photocopy democracy (presumed consent is transferred, copy by copy, to ever-greyer and more remote institutions) or no democracy at all.
When everything has been globalised except our consent, corporations fill the void. In a system that governments have shown no interest in reforming, global power is often scarcely distinguishable from corporate power. It is exercised through backroom deals between bureaucrats and lobbyists.
This is how negotiations over the Transatlantic Trade and Investment Partnership(TTIP) began. The TTIP is a proposed single market between the United States and the European Union, described as "the biggest trade deal in the world". Corporate lobbyists secretly boasted that they would "essentially co-write regulation". But, after some of their plans were leaked and people responded with outrage, democracy campaigners have begun to extract a few concessions. The talks have just resumed, and there's a sense that we cannot remain shut out.
This trade deal has little to do with removing trade taxes (tariffs). As the EU's chief negotiator says, about 80% of it involves "discussions on regulations which protect people from risks to their health, safety, environment, financial and data security". Discussions on regulations means aligning the rules in the EU with those in the US. But Karel De Gucht, the European trade commissioner, maintains that European standards "are not up for negotiation. There is no 'give and take'." An international treaty without give and take? That is a novel concept. A treaty with the US without negotiation? That's not just novel, that's nuts.
You cannot align regulations on both sides of the Atlantic without negotiation. The idea that the rules governing the relationship between business, citizens and the natural world will be negotiated upwards, ensuring that the strongest protections anywhere in the trading bloc will be applied universally, is simply not credible when governments on both sides of the Atlantic have promised to shred what they dismissively call red tape. There will be negotiation. There will be give and take. The result is that regulations are likely to be levelled down. To believe otherwise is to live in fairyland.
Last month, the Financial Times reported that the US is using these negotiations "to push for a fundamental change in the way business regulations are drafted in the EU to allow business groups greater input earlier in the process". At first, De Gucht said that this was "impossible". Then he said he is "ready to work in that direction". So much for no give and take.
But this is not all that democracy must give so that corporations can take. The most dangerous aspect of the talks is the insistence on both sides on a mechanism called investor-state dispute settlement (ISDS). ISDS allows corporations to sue governments at offshore arbitration panels of corporate lawyers, bypassing domestic courts. Inserted into other trade treaties, it has been used by big business to strike down laws that impinge on its profits: the plain packaging of cigarettes; tougher financial rules; stronger standards on water pollution and public health; attempts to leave fossil fuels in the ground.
At first, De Gucht told us there was nothing to see here. But in January the man who doesn't do give and take performed a handbrake turn and promised that there would be a three-month public consultation on ISDS, beginning in "early March". The transatlantic talks resumed on Monday. So far there's no sign of the consultation.
And still there remains that howling absence: a credible explanation of why ISDS is necessary. As Kenneth Clarke, the British minister promoting the TTIP, admits: "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 a US-EU treaty? A report commissioned by the UK government found that ISDS "is highly unlikely to encourage investment" and is "likely to provide the UK with few or no benefits". But it could allow corporations on both sides of the ocean to sue the living daylights out of governments that stand in their way.
Unlike Karel De Gucht, I believe in give and take. So instead of rejecting the whole idea, here are some basic tests which would determine whether or not the negotiators give a fig about democracy.
First, all negotiating positions, on both sides, would be released to the public as soon as they are tabled. Then, instead of being treated like patronised morons, we could debate these positions and consider their impacts.
Second, every chapter of the agreement would be subject to a separate vote in the European parliament. At present the parliament will be invited only to adopt or reject the whole package: when faced with such complexity, that's a meaningless choice.
Third, the TTIP would contain a sunset clause. After five years it would be reconsidered. If it has failed to live up to its promise of enhanced economic performance, or if it reduces public safety or public welfare, it could then be scrapped. I accept that this would be almost unprecedented: most such treaties, unlike elected governments, are "valid indefinitely". How democratic does that sound?
So here's my challenge to Mr De Gucht and Mr Clarke and the others who want us to shut up and take our medicine: why not make these changes? If you reject them, how does that square with your claims about safeguarding democracy and the public interest? How about a little give and take?
Subscribe to:
Posts (Atom)