- Fair migration system for UK business and communities
- Retaining strong, collaborative relationship with EU
- Protecting national security and tackling cross-border crime
- Delivering for all nations and regions of the UK
- Protecting workers' rights and employment protections
- Ensuring same benefits currently enjoyed within single market
Showing posts with label single market. Show all posts
Showing posts with label single market. Show all posts
Monday, 27 March 2017
Brexit deal must meet six tests, says Labour
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.
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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.
Saturday, 9 November 2013
Transatlantic Trade and Investment Partnership: Wake up people, we’re being shafted
A global ban on left wing politics
George Monbiot
Remember that referendum about whether we should create a single market with the United States? You know, the one that asked whether corporations should have the power to strike down our laws? No, I don’t either. Mind you, I spent ten minutes looking for my watch the other day, before I realised I was wearing it. Forgetting about the referendum is another sign of ageing. Because there must have been one, mustn’t there? After all that agonising over whether or not we should stay in the European Union(1), the government wouldn’t cede our sovereignty to some shadowy, undemocratic body without consulting us. Would it?
The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations. I mentioned it a couple of weeks ago(2). But I left out the most important issue: the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing.
The mechanism is called investor-state dispute settlement. It’s already being used in many parts of the world to kill regulations protecting people and the living planet.
The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian supreme court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property(3).
During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills (does this sound familiar?). It was sued by the international utility companies whose vast bills had prompted the government to act. For this and other such crimes, it has been forced to pay out over a billion dollars in compensation(4).
In El Salvador, local communities managed at great cost (three campaigners were murdered) to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy? Not for long perhaps. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of its anticipated future profits(5).
In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada’s patent laws are changed(6).
These companies (and hundreds of others) are using the investor-state dispute rules embedded in trade treaties signed by the countries they are suing. The rules are enforced by panels which have none of the safeguards we expect in our own courts(7,8). The hearings are held in secret. The judges are corporate lawyers, many of whom work for corporations of the kind whose cases they hear. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet they can overthrow the sovereignty of parliaments and the rulings of supreme courts.
You don’t believe it? Here’s what one of the judges on these tribunals says about his work. “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.”(9)
There are no corresponding rights for citizens. We can’t use these tribunals to demand better protections from corporate greed. As the Democracy Centre says, this is “a privatised justice system for global corporations.”(10)
Even if these suits don’t succeed, they can exert a powerful chilling effect on legislation. One Canadian government official, speaking about the rules introduced by the North American Free Trade Agreement, remarked, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”(11) Democracy, as a meaningful proposition, is impossible under these circumstances.
This is the system to which we will be subject if the transatlantic treaty goes ahead. The US and the European Commission, both of which have been captured by the corporations they are supposed to regulate, are pressing for investor-state dispute resolution to be included in the agreement.
The Commission justifies this policy by claiming that domestic courts don’t offer corporations sufficient protection because they “might be biased or lack independence.”(12) Which courts is it talking about? Those of the US? Its own member states? It doesn’t say. In fact it fails to produce a single concrete example demonstrating the need for a new, extra-judicial system. It is precisely because our courts are generally not biased or lacking independence that the corporations want to bypass them. The EC seeks to replace open, accountable, sovereign courts with a closed, corrupt system riddled with conflicts of interest and arbitrary powers.
Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw left-wing politics.
This is why there has been no attempt by our government to inform us about this monstrous assault on democracy, let alone consult us. This is why the Conservatives who huff and puff about sovereignty are silent. Wake up people, we’re being shafted.
George Monbiot
Remember that referendum about whether we should create a single market with the United States? You know, the one that asked whether corporations should have the power to strike down our laws? No, I don’t either. Mind you, I spent ten minutes looking for my watch the other day, before I realised I was wearing it. Forgetting about the referendum is another sign of ageing. Because there must have been one, mustn’t there? After all that agonising over whether or not we should stay in the European Union(1), the government wouldn’t cede our sovereignty to some shadowy, undemocratic body without consulting us. Would it?
The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations. I mentioned it a couple of weeks ago(2). But I left out the most important issue: the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing.
The mechanism is called investor-state dispute settlement. It’s already being used in many parts of the world to kill regulations protecting people and the living planet.
The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian supreme court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property(3).
During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills (does this sound familiar?). It was sued by the international utility companies whose vast bills had prompted the government to act. For this and other such crimes, it has been forced to pay out over a billion dollars in compensation(4).
In El Salvador, local communities managed at great cost (three campaigners were murdered) to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy? Not for long perhaps. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of its anticipated future profits(5).
In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada’s patent laws are changed(6).
These companies (and hundreds of others) are using the investor-state dispute rules embedded in trade treaties signed by the countries they are suing. The rules are enforced by panels which have none of the safeguards we expect in our own courts(7,8). The hearings are held in secret. The judges are corporate lawyers, many of whom work for corporations of the kind whose cases they hear. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet they can overthrow the sovereignty of parliaments and the rulings of supreme courts.
You don’t believe it? Here’s what one of the judges on these tribunals says about his work. “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.”(9)
There are no corresponding rights for citizens. We can’t use these tribunals to demand better protections from corporate greed. As the Democracy Centre says, this is “a privatised justice system for global corporations.”(10)
Even if these suits don’t succeed, they can exert a powerful chilling effect on legislation. One Canadian government official, speaking about the rules introduced by the North American Free Trade Agreement, remarked, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”(11) Democracy, as a meaningful proposition, is impossible under these circumstances.
This is the system to which we will be subject if the transatlantic treaty goes ahead. The US and the European Commission, both of which have been captured by the corporations they are supposed to regulate, are pressing for investor-state dispute resolution to be included in the agreement.
The Commission justifies this policy by claiming that domestic courts don’t offer corporations sufficient protection because they “might be biased or lack independence.”(12) Which courts is it talking about? Those of the US? Its own member states? It doesn’t say. In fact it fails to produce a single concrete example demonstrating the need for a new, extra-judicial system. It is precisely because our courts are generally not biased or lacking independence that the corporations want to bypass them. The EC seeks to replace open, accountable, sovereign courts with a closed, corrupt system riddled with conflicts of interest and arbitrary powers.
Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw left-wing politics.
This is why there has been no attempt by our government to inform us about this monstrous assault on democracy, let alone consult us. This is why the Conservatives who huff and puff about sovereignty are silent. Wake up people, we’re being shafted.
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